Yes, 2017 is upon us and hopefully you have scratched the surface of some of your new year resolutions. What are your resolutions for your “dream home” desires? Are you looking to buy or invest…sell or rehab? Well if you are looking to buy, have you started executing your pre-buyer tasks? If not, here’s a great 14-step checklist to get you going.
1. Review your credit report (get one for free at annualcreditreport.com).
2. Dispute any blemishes on your credit report if they don’t look right.
3. Gather your (and anyone else applying for the the mortgage) last two years of tax returns and proof of income (W2s or pay stubs)—or your year-to-date profit and loss statement if self-employed.
4. Have your down payment money and closing money ready in the bank.
5. If the down payment and closing money were gifted to you, be ready to explain it.
6. If you’ve been renting with a private landlord, put together the last 12 months of proof (such as check copies and money order receipts) showing that you’ve been on time each month with your rent payments. Also ask your landlord for a written referral.
7. Gather personal documents, like two forms of government identification. Also have other personal paperwork, like copies of divorce papers, if applicable.
8. Provide proof of regular income from all forms including Social Security, child support or government assistance.
9. Provide proof of account balances for IRAs and retirement accounts.
10. Disclose money held in the stock market.
11. Bring proof of other property currently owned.
12. Be ready to disclose past financial issues like bankruptcy. Provide a written explanation of what happened and what steps you have taken to correct your situation.
13. Keep your credit score healthy. So do not do the following:
• Apply for new credit.
• Take on new debts or make large purchases.
• Cancel any current credit accounts.
• Ask a creditor to lower your limit.
Remember, if you apply for a mortgage loan with an excellent credit score and the score goes down during the pre-approval or mortgage process, you may not qualify for the loan.
When you’re all done and the pre-approval is successful, your lender will give you a Good Faith Estimate, or GFE. This is a line estimate of what your general mortgage costs will be if you go with that lender. Now that you have it, there’s one final step to take.
14. Go to another lender and get pre-approved all over again.
You’re not done yet. Mortgages are too expensive to take the first offer. Get out there and do some comparison shopping, using those GFEs as your guide.
HERITAGE HELPFUL HINTS: Use your federal income tax return to help go towards any of your financial house seeking needs.