We always suggest any homebuyers check with a lender before getting started on your search for a home. There are many reasons for this but the most important is knowing where you stand in what you can afford and what options you might have available to you. You might find you’re not in a position to buy in the area you want or maybe you can actually afford more. For example if you are looking for a fixer upper you need to know about 203K repair loans and if you qualify. There are so many options you just need to find out what works best for you.
If you want to be ahead of the game you need to gather all the info the lender will ask you and review it yourself first. The usual rule is 2 last paychecks, 2 months of bank statements, and last 2 yearly tax returns (signed). Now consider what other bills you owe such as car payments, credit cards, and any other ongoing payments for more than a few months as they will show up in the credit check by the lender. Add these all up and then you might see the need for a ‘financial diet’.
So where do you start? First examine the short term debts such as credit cards and revolving accounts that have a balance that could be paid down. Also look at things like car payments, especially if you are in the last year of the loan. Now figure out where you can diet (items you can do without i.e. financial ice cream). Take that money and pay down or off any bills you can to get yourself in better financial shape. Why is this important? First you want make sure you are ready for the financial responsibility it takes to own a home. But more importantly it helps you qualify for a better rate and possibly save you thousands of dollars on your home mortgage over the life of the loan.
So buckle down and stop eating out all the time. You’ll find you get in both better financial and physical shape with proper dieting. Call The Derrick Team with any questions when considering a home purchase. We’ll be happy to help you even when you are starting your ‘financial diet’. We can help guide you months, even years in advance of your next home purchase! Call or text today at 317-563-1110 or use our handy Contact Page.