Preparation is key to navigating today’s housing market. ABA offers the following tips to help prepare potential homebuyers.
Know your own financial situation.
Before you begin the home loan application process, determine what you can realistically afford. Take into consideration your credit score, how much debt you currently carry and what type of down payment you are prepared to make.
Have your documents ready.
You will be required to furnish the following information depending on your employment and financial situation:
- Pay stubs;
- Tax returns;
- Financial statements (one that is less than 60 days old);
- Copies of additional monthly payments such as car loans, credit cards, and student loans; and
- Any other information (such as proof of additional income) that you think will help your banker to positively evaluate your credit request positively.
Review the basics.
Knowing the fundamentals of the home loan process is an excellent way to prepare to choose the right mortgage. Make sure you are familiar with interest rates, loan terms and additional fees associated with buying a home.
American Bankers Association