The first step for home buyers isn't to look for a home yet - but to understand how much home you can afford. This section deals with financing.
UNDERSTAND YOUR FINANCIAL SITUATION
Getting a grasp on your income, debt, and savings will help you determine how much home you can afford. It will also help you get approved for a mortgage.
Most people finance the purchase of a home and that means getting a mortgage. Lenders will soon comb over your financial life and they want to see consistent income and spending habits. It's important for everything to be in order before applying for a mortgage.
WHAT LENDERS WILL LOOK AT
Start getting your financial documents in order now. Having these in place will help speed up the home buying process.
Here's a very important tip for getting a mortgage: Do not make any changes to your financial situation!
A few other tips are below. Start these at least three months before applying for a mortgage and all the way to the close:
- Don't make any big purchases.
- Don’t make any big in- or out-flows from your accounts.
- Don’t apply for other loans or credit cards.
- Above all, don’t change jobs.
What can you really afford?