When it comes to time to buy a home, you want to start by ensuring you have all of your ducks in a row – to lead to a seamless and smooth transaction. The process is never simple, but get things in order can make it so much easier!

Get Your Files In Order Before You Buy A Home!

When you start the home-buying process, your agent, title company, and broker are going to begin requesting a number of different files from you to ensure that you’re prepared financially to take the leap into homeownership. Gathering these items in advance will help make that process flow smoother:

• Tax Returns – Most lenders will require at least two years of tax returns to confirm your income and any deductions you may have taken.
• Bank Statements – Your lender is going to want to see recent bank statements (generally within the past 3-6 months) from all relevant accounts, such as checking, savings, IRA or 401K accounts.
• Pay Stubs – You’ll need to provide current pay stubs, as well as ones from previous months.
• Asset Documentation – In addition to the above documents, lenders may also require more detailed documentation of your assets such as investments, real estate holdings, cars and other property.
• Credit Report & Scores – Your lender will pull a credit report and scores to assess your creditworthiness. It’s important to keep a close eye on these reports in the months leading up to applying for a mortgage, as any negative changes could cause delays or even derail your application altogether.
• Letter of Explanation – If your financial history is complicated or contains large deposits from unknown sources, you may need to submit a letter of explanation. This document can be used to explain any discrepancies on your credit report or provide a more detailed description of something the lender may not be able to glean from just looking at the paperwork.
• Proof of Income – When applying for a mortgage, lenders will require proof that you have a steady source of income and can afford the monthly payments. This could include paystubs, tax returns, W-2s, or other forms of income.
• Additional Documentation – Depending on the specifics of your loan application, lenders may require additional documents. This could include bank statements, proof of assets, rent payment records, or other paperwork. Be sure to ask the lender in advance what documentation is required so you can have it ready and make the process move more quickly.

Be Mindful of Your Finances When You Buy A Home!

Now is not the time to go out and buy a new car, or apply for a new credit card. When it comes to buying a home, its a good idea to put those sorts of things on hold so as not to effect your credit reporting in any way. The last thing you want to do is get to closing day, and something comes up which would effect your home buying success.

When it comes to buying a home, it’s crucial to be financially responsible. This means avoiding unnecessary purchases, like a new car or a new credit card, that could potentially harm your credit reporting. While it may be tempting to upgrade your lifestyle with these purchases, it’s important to remember the bigger picture: your home buying success.

The last thing you want is to encounter a surprise that could jeopardize your dream of owning a home. So, stay focused and put aside those impulses for now. Trust us, it’ll be worth it in the end.