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Click Here for a Free Copy of Your Credit Report
Here's some important advice: as soon as you have made the decision that
you want to buy a house, one of your first steps should be to make certain that you have a clear picture of your
financial situation. At a minimum, you will most likely want to do the following:
 Run a Credit Report
to make certain that there are no discrepancies or problems in your credit history.
Click here to get a free copy of your credit report.
Do an analysis of what
your current financial situation is: where the money comes from and where the money is presently going as well
as an analysis of how a house purchase will affect your budget. Be sure to make provisions for utility cost changes
(either higher or lower) and maintenance and repairs, as well as the proposed mortgage payment. You can print a detailed budget analysis here.
Begin to gather items
such as: last two years Income Tax returns, current copies of pay stubs, records of any past derogatory credit
history that has since been paid off, and records of any supplemental income you may have. If you are self employed,
you will need all business records and tax returns for the last two years. Having these items close at hand will
save an enormous amount of time when the Mortgage Company begins to ask for them (and ask for them they will!)
If it is possible to
do so without adversely affecting your down-payment situation, pay off minor debts. Many people have several small
credit accounts (gas cards, department store charges, etc.) totaling less than a few hundred dollars. If you can,
pay them down to a zero balance. The less debt you have the easier your Mortgage "sailing" will be.
Do not incur any new
debt. Many mortgage applications have been stopped in their tracks because the applicants had decided a week before
the application that a shiny new car with a big buy or lease payment would look just perfect in the driveway of
their new home. Since mortgages are based on debt to income ratios (the amount you pay out monthly versus the amount
you bring in) a newly acquired debt could be enough to throw the ratios off and make the mortgage unobtainable.
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