You’ve decided you’re ready, and maybe even started to do some of your owns searching to see what’s out there, but what should you be doing now?

  1. Get your financial records ready – Prepare your tax documents, save your pay stubs, and get anything else that relates to your personal finances – or the personal finances of anyone you’re buying with – ready. If you’re self employed, be prepared to show the last two years worth of tax returns. A lender will want to see a comprehensive look at your finances.
  2. Consider paying off any debt you have – Without cutting yourself short for a down payment and potential closing costs, it’s time to thing about paying off your credit cards, student loans, or vehicle if possible. This will decrease your debt burden and increase the amount you’ll qualify as well as your ability to make monthly payments.
  3. Monitor your credit – Check your credit and see where you fall. The better your credit, the better rate you’ll get when buying. This is critical for getting a good interest rate and lowering your monthly payments! Additionally, don’t do anything to hurt your credit during the purchase process. Discuss with your lender what items on your credit are more important to address first. You might be surprised when they tell you that your medical debt holds significantly less weight against your ability to buy than your credit card debt!
  4. Be careful with your finances moving forward – Don’t add any new debt. Hold off on buying a new car, furniture, or anything on credit. Your lender will compare your finances against your debt to qualify you for a loan, and adding new debt can hurt your loan. NEVER add new debt after you’re under contract, or you could jeopardize the purchase AND your earnest money deposit!