Tis the season for spring—beautiful flowers, gorgeous sunsets, warm winds, and refreshing family vacations, and of course…HOME BUYING!
It’s that time of year when you come out of your winter hibernation (and if you’re from the deep south you don’t know what that means), start to organize and spring clean, then take time to begin to dream again about what you really want next in life. I believe for many of you, this is your year to buy a new home.
I’m so excited because my banker, Mark A Fitzpatrick provided great advice to me during the home buying process and I’ve asked him to share a few great tips to help you prepare to purchase a home.
1. Check your credit report for errors. You would be surprised to see who has checked your credit the last 6 months, and you'll be asked to verify whether you opened accounts with each of them.
2. Check your credit card usage. Be sure the highest balance is not more than 30% of the card limit, even if that means increasing your credit limit to accomplish this.
3. Set up a bank account with limited activity to minimize explanations. Banks look at repetitive withdraws, so that routine check to your gym membership or kid's college will need be discussed.
4. Have funds for a down payment and closing costs, and don’t forget lender reserve requirements. Most lenders want not just to know you can afford it, or cover the down payment, but to have more than two cans of soup in the cupboard at move-in. The larger the loan, the more they require, but it's typically 2-6 months of mortgage payments, readily accessible. They do count retirement funds, but only to 60%. And most will ask for "terms of withdraw", the one page form that says whether you can access the money therein with a penalty, or if it is restricted.
5. Work with a lender who knows your market, knows his products, and takes time to get to know you. The business is too hard to go it alone, and most of what used to be accepted on its face is now double-checked more than once. Your loan officer should be motivated to serve you…and if they aren't see Mark's contact information below!
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I’d love to hear from you. Let me know if this blog has helped you prepare for the process.