The first step to getting the right financing for your situation is to organize all of your important documents.

Start A "Home Buying" File: You will want to get all of the necessary documents that the lenders will request. Depending on your situation, you will require different levels of documentation. Gather as much of the following information as possible so that you have it when you meet with your lender:

• If you are salaried... Provide two years W-2 and one month of most recent pay stubs
• If you are self-employed... Provide two years tax returns and a YTD profit and loss statement.
  
• If you own rental property... Provide rental agreements and two years tax returns.
  
• Bank statements... Provide three months bank statements for each bank, stock and mutual fund account.
  
• Investment accounts... Provide recent copies of any stock brokerage or IRA/401K accounts that you may have.
  
• Divorce decree... Provide a copy of divorce decree if applicable.
  
• Foreign documentation... If you are NOT a US citizen, provide a copy of your green card (front & back), or if you are NOT a permanent resident provide us with your H-1 or L-1 visa.

If you haven’t already started putting money aside, now is the time to do so. You will need extra money to cover incidental home buying costs and closing costs (appraisals, inspections, insurance, etc.

Check Your Credit Rating: It's not quite as simple as knowing your credit score. Lenders look at a number of factors when deciding on how much they will lend to you for the purchase of your new home. You will want to pull a full credit report (you can get a free copy of your report annually by going to www.annualcreditreport.com). This lets you see everything that's on your report. You'll also want to know your credit "score" and you can get that at www.myfico.com. Credit scores range between 400 and 800. 620 + is considered “good”. 680-700 + is considered “premium” and may possibly help get you a lower interest rate.

If you do have issues on your credit report, try to resolve them before you start searching for your dream home.

Click Here to Learn How to Repair Your Credit

Below you will find individual information for each of the credit reporting agencies (Note: the credit scoring system is changing early 2007)

Savings & Debt: If you are buying real estate, it is time to start accumulating funds towards your down payment, closing costs (appraisal, miscellaneous fees, escrow, title insurance, etc.) and expenses such as inspections. Furthermore, try to pay down existing revolving and high interest rate debt like credit cards.

Don't Rock the Boat! When shopping for a home, hold off on changing careers (or even jobs). Don't buy a new car or boat. Keep and eye on your credit cards (Keep balances under 25-30% of the total limit). And don't start shuffling money around. Lenders like stability!

Thinking of turning your first home into a real estate investment? Click here to learn about our real estate investing solutions.

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