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Where do you begin to secure finances for purchasing a new home, refinancing an existing home, or obtaining a real estate equity line of credit? Loan acquisition can get confusing, but you can simplify the process and avoid a lot of potential headaches by getting off to a good start. Here are a couple of ways to do so:
1.1.Build your green file.
Organizing and compiling all pertinent financial documents into a green file is an absolute must for any potential borrower. Think of the green file as a resume or profile that will give lenders an idea of what kind of debtor you might be. The typical green file should contain:
- Financial statements
- Bank Accounts
- Investments
- Credit card
- Auto loans
- Recent Pay stubs
- Tax returns from the past two years
Don’t hesitate to consult us for additional information.
1.2.Consider your credit rating.
Another means by which lenders gauge your trustworthiness as a borrower is through your credit rating. These indicate your credit history, which includes such crucial information as your number of open loans and the punctuality of your past payments.
- Treat your credit like gold. Credit ratings are important because they often determine whether or not you will be approved for a loan and what your interest rate will be. We suggest checking your credit reports at least once a year or before making any major purchase to ensure the accuracy of the information contained there.
- What the scores mean. Ratings usually vary between 400 and 800. Anything above 620 is good. If you exceed 680, you are considered premium and may even get a lower interest rate.
- Determine your credit rating. You can do this by contacting a credit reporting agency such as Equifax, Experian or Trans Union.
- Prioritize your costs and savings.
Buying real estate wisely is all about choosing what to spend for first.
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