Start A Green File
All of your important financial documents should be contained in a green file. Lenders will require you to provide them with copies of financial statements, such as bank accounts, investments, credit cards, auto loans, recent pay stubs, and two years’ tax returns, regardless of the loan type. Please refer to the
Preparing to Buy Section of the Buyers Guide for the general overview of the contents of a green file.
Check Your Credit Rating
Credit scores typically range from 350 to 850. A credit score within the range of 670-739 is considered “good.” However, having a credit score of 740+ is considered a “premium,” and could help you receive a lower interest rate.
To help you determine your credit rating, reach out to one of the three major credit reporting agencies listed below. If your credit score falls below the premium range, ask your lender what steps you can take to improve your score. Moving forward, it’s important to treat your credit like gold.
Savings and Debt
If you’re purchasing real estate, one of the very first things you should do is start saving for your down payment, closing costs (appraisal, miscellaneous fees, escrow, title insurance, etc.), and other expenses, such as inspections. On top of saving, begin paying off any credit card debt to avoid having to pay a high-interest rate.
Toe The Line
Lenders like stability, so changing careers, moving money around, or buying big-ticket items is not recommended at this time. Before making any major changes, meet with your lender to discuss the best course of action. For those tempted to buy a big ticket item, it’s important to consider the following:
A $500 monthly debt payment, such as a credit card or auto loan, could lower the amount of home you can afford by about $83,000!*
*Based on a 30 year mortgage at 6% interest.
