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How do I prepare for a home purchase?

We talk to people all the time who feel like they want to move, but are afraid of missing out on getting the best transaction they can get. 

The solution to this is to plan.  Not just for the purchase, which is very important, but plan ahead for the loan, too. 

An old cliché in my business is, “Everybody wants a house, but nobody wants a loan.”  It’s true, but the reality is that positioning yourself for the best loan possible can directly affect what the house you wind up with can look like.  The difference in payment between a 3% mortgage and a 4% mortgage on the same amount of money borrowed can be great enough to change your purchase price by thousands of dollars.  That can mean more house, different neighborhoods, maybe even a different lifestyle altogether if you aren’t paying close enough attention. 

Really, your best bet is to plan for the loan before you plan for the move. 

If you come to us early enough in the process, we can connect you with some very capable and strong lenders who will guide you through a review of your own finances as they pertain to lending.  These people can help you tweak your position, sometimes almost painlessly, to maximize your buying power. 

First, look at your own situation.  Here is a quick list of “do’s” and “don’ts”  that you can consider and take action with right now, without even picking up a phone.  If you are thinking about moving, even if it’s a year away, please start here:

DO…stay current on all existing credit accounts – make those payments ON TIME!

DO …continue using your existing credit as normal – but without large purchases

DO ….collect and maintain all documents a lender will need ahead of time.  Keep all original paystubs, bank statements, tax returns and other financial documentation handy as you receive them. Get into the habit because you may be required to update your loan file during the process

DO ….notify us if you are planning on receiving any gift funds for the down payment or closing costs

DO …notify us if you have any major financial expenditures coming up that will lower your assets

DO …notify us if you have any upcoming employment changes, raises, promotions, change in pay structure, etc

DON’T ….open any new credit accounts or close any current ones

DON’T ….make any large purchases on your current credit accounts or increase your spending on current credit accounts – business as usual when it comes to credit

DON’T …co‐sign for anyone else for a home or car loan or any other type of debt

DON’T …dispute any credit accounts on your credit report before or during the loan process – disputed accounts can alter your credit score

DON’T …pay off any collections or charge‐off’s on your credit report unless advised by a credit professional or your mortgage consultant ‐ activating these accounts by taking action may

alter your credit score.

DON’T….make any type of employment or compensation changes without notification to your mortgage consultant

DON’T …close any current bank accounts, open any new bank accounts, or move money around between accounts

DON’T ….deposit any cash to your bank account without contacting your mortgage consultant to discuss the requirements of documentation and whether or not it will be accepted as funds for closing

This list applies to anybody, and is not comprehensive.  You will need and want a personalized plan to maximize your options, so please call us today!  We will make sure that a licensed loan professional helps you with your plan, and when you are ready we will make sure that the plan gets used to get you into the best home possible for your income and financial position!

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