Organizing Your
Finances
A
crucial step in starting your search for a new home is having a clear
idea of your financial situation. By getting a handle on your income,
expenses and debts, you'll have a much better idea of what you can afford
and how much you'll need to borrow.
For lender to
verify this information, though, they're going to need to look at
your financial records. It is also important to remember that you
should include records for each person who will be an owner of the
house.
So before you
even visit the bank, make sure you'll be able to provide copies of
these important documents:
Paycheck Stubs
Remember that
lenders are most interested in your average income. Not only with
they want to see this month's paycheck, but also how much you've been
making for the past two years. Steady employment is also more attractive
to londers, so if you've been hopping from job to job, be prepared
to discuss the reasons why.
Bank Statements
In order to qualify
for a loan, most lenders will also ask you for copies of your bank
statements. Ideally, they'd like to see a steady history of savings--
or at the very least, that you're not bouncing checks every month.
Tax Records
It's always a
good idea to save copies of your tax returns, especially if you're
self-employed. If you own your own business, it's important to note
that lenders generally consider your income as the amount you paid
taxes on-- not the gross income of the business.
Dividends &
Investments
Lenders will usually
consider long-term investment dividends, as well as your investment
portfolio, when evaluating your income.
Alimony/Child
Support
If you receive
steady payments as part of a divorce settlement or for child support,
you can also include this as part of your gross income. Just remember
that lenders will want to see a copy of your divorce/court settlement
verifying the amount of the payments.
Credit Report
Virtually every
lender will want to see a copy of your credit report as part of the
loan application process. The report lists all of your long-term debts,
as well as your payment history. In general, they will require you
to pay for the credit report (approximately $50) but if you have a
recent copy, they may accept that instead.
For more information
Email or call Jeff at (973) 691-0022 or (973) 347-8713.
