Preparing to Buy

Before you start shopping for your property, it is a good idea to make some preparations.

Build Your Green File.

A green file contains all your important financial documents. You will need it to secure financing for your property. The typical green file should contain:

• Financial statements
• Bank accounts
• Investments
• Credit cards
• Auto loans
• Recent pay stubs
• Tax returns for two years
• Copies of leases for investment properties
• 401K statements, life insurance, stocks, bonds, and mutual account information.

Check Your Credit Rating.

Being late on just one or two payments can really hurt your credit. Your credit score will have a huge impact on what type of property you can buy, and at what price. Don’t stress out before you do anything. Just talk to your mortg broker or credit union to run your credit and find out what you qualify for. You might be surprised that you qualify for a mortgage amount that is higher than you feel comfortable with. This should be done BEFORE you start looking. Finding a real estate agent and a mortgage broker you feel comfortable with is important. Friendly is good, but proven results with many years of experience is more important – great and friendly people are out there. ( If you are reading this – you found your agent ). Your success, is their success. They won’t get paid, until you buy! However, a great real estate agent and mortgage broker will go the extra mile to make you happy. If you feel all they want is a check, you might want to sever that arrangement. A referral from a trusted family member or friend is best. If you don’t have that option, ask around, and check out their reviews. Once you have your agent, and mortgage broker, you are off to a great start. Your real estate agent and mortgage broker will tell you what is needed, what to do, and what not to do before you buy. Many agents consider each sale a one shot paycheck. A few agents want to be your agent, for life. You will likely know who you are dealing with very quickly. It is not advised to sign any type of long-term buyer broker agreement until you feel comfortable with that person. Don’t forget to ask if they ever charge their buyers (you) an extra fee at closing.

Be Careful With Your Finances.

Now is not a good time to make sudden career changes or large purchases. Save your money! Don’t buy anything big or even pay off debt without talking to your mortgage broker first. Your mortg broker will advise you if having more cash, or less debt is a better option. It is also important to look forward to what your financial situation will be after closing. Being completely tapped out is never a good thing. Maybe wrapping some closing costs into the contract, or a slightly higher payment might be better. If your car or AC breaks 2 weeks after closing – will you have any money left over for that unexpected repair? You want to approach your property purchase from a position of financial stability.