If you’re in the market for a new home, make things as easy as possible for yourself by following a few basic rules of thumb …
- Check your credit report, correct any errors you find, pay down your debts if at all possible, and continue to pay all your bills on time.
- Gather financial information such as two years of federal tax returns (plus business tax returns if you are self-employed), two years of W-2 forms, two to three months of pay stubs and bank statements, and summaries of all assets and debts.
- Determine the exact source and amount of your down payment. Talk to your lender about the best timing for liquidating funds associated with stocks, retirement accounts, etc.
- Talk to your lender about being pre-qualified or pre-approved for a loan, so you know exactly what price range fits your finances.
- Respond as quickly as possible to your lender during the underwriting process, to ensure that escrow and closing remain on schedule.
- Deposit large sums of money into your accounts in the three months before you apply for a home loan, or during the home loan process.
- Transfer money from account to account, making it difficult for an underwriter to assess your financial situation.
- Take out cash advances on credit cards, make major credit card purchases, or apply for new credit (including debt consolidation loans/credit cards) during the purchase process.
- Co-sign on any new loans for friends or family.
- Change jobs during the course of the purchase period.