I am often asked if it is a good idea to start looking into financing before actually finding a home. Short Answer: YES!
A recent article on MSN Money discussed that topic as well, and it is worth a read. Check it out here. Bottom line, it is always a good idea to start with your financing. First off, the lender can tell you how much house you can afford, so that you are not shopping out of your price range. Buyers that try to stretch the budget too far often end up being denied, especially in this market. A lender will give you an idea of what you should be looking to spend.
A credit check by the lender will give you info about any credit issues you may want to clear up before putting in an offer. Also, it’s a good idea to pull a free credit report each year anyway.
The article gives a great list of items you will want when applying for a loan;
- Two months of pay stubs.
- Two months of bank statements: That means checking, savings, brokerage and retirement accounts. Be sure to include all pages, not just the summary page.
- Two years of W-2s if you are a salaried employee.
- Two years of tax returns if you are self-employed.
- Rental history for the last two years if applicable.
Lastly, don’t let the media or market rumors make you think there are no loans out there. There is still money to be lent. Even if you don’t have a 20% downpayment, there are FHA Loans available that require a far lower percentage – you will pay PMI and some fees, but most often it is still worth it.
If you are looking, have questions, need help with financing or real estate in general, give me a shout at 978-657-7437 or www.montefortelaw.com .