Before you start shopping for your property, it’s a good idea to start making some preparations.
Build your file.
Your file should contain all your important documents. You will need it to secure financing for your property. The typical file should contain:
- Financial statements
- Bank accounts
- Investments
- Credit card debt
- Auto loans
- Recent pay stubs
- Tax returns for two years
- Copies of leases for investment properties
- 401k statements, life insurance, stocks, bonds, and mutual account information
Get Prequalified
A pre qualification letter can be obtained from your lender indicating a written willingness to loan money for the purchase of a property. This letter will specify the “approved” price and percentage of financing of the purchase price. These letters typically expire within sixty (60) days and can be renewed by contacting your loan officer. Don’t delay in starting this conversation with a lender, even if you’re not ready to buy! You never know when the right property will materialize and your offer won’t be submitted without this letter.
Be careful with your finances
Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability. Your lender will confirm that your financial picture is basically the same before closing as it was when you initially applied for the loan.