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Before you start shopping for your Northern New Jersey home, it’s a good idea to make some preparations and obtain a pre-approval and be mindful of the steps to purchasing a home. Don’t depend on advice from friends and family or your personal calculations to figure out what you can afford. Drive around towns of interest and go to public open houses to freely walk through homes in different price ranges. This will help you decide upon which town(s) you like best along with getting a feel for types of houses, neighborhoods and price range that best suits your needs and desires.
2.1 Build Your Green File
A green file contains all your important financial documents. You’ll need them to secure financing for your home. Your mortgage consultant will review everything you need to provide. The typical green file should contain information on the following:
- Financial statements
- Bank accounts
- Investments
- Credit cards
- Auto loans
- Recent pay stubs
- Tax returns for two years
2.2 Check Your Credit Rating and Savings
Your credit score along with the amount of funds you have available for a down payment and closing costs will have a huge impact on what type of home (single-family, multi-family, investment) you can buy and at what price. The better the score the better the potential for a lower interest rate on your mortgage.
Your mortgage consultant will be able to pull your credit reports during the pre-approval process. You can independently check your credit rating directly with the three credit reporting agencies Equifax, Experian and Trans Union. You should talk with at least two or three different mortgage consultants and compare their services, options, and information to see what is best for you. Don’t forget, though, you can get a pre-approval from one lender and complete the mortgage with another if you find a better deal. We can provide you with mortgage consultants.
2.3 Be Careful with Your Finances
Once you get a pre-approval, it is not a good time to make career changes or large purchases. If a sudden job change occurs, etc. please check with your mortgage consultant to understand how your approval range has been affected.
You want to approach home buying from a position of financial stability. If you have family and friends giving you money towards the purchase of your home, check with your lender on the best way to handle these gifts.
Do not for any reason make a change in your financial profile before you actually own the property you are buying. Your lender will run a credit report a couple of weeks before and on the actual day of your closing — when the property is finally transferred to your ownership — to make sure you have not had any major changes to your financial profile. If you do, it could potentially derail you from getting a mortgage at the very last moment.
To understand your affordability range and the mortgage options available to you, ask us for a mortgage loan expert to contact.
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