Jun 03 2008
Getting ready to buy a first home
What should we do to prepare for a first home purchase?
Unless you have the opportunity for a cash purchase, most of the pre-purchase preparation of home buying (aside from finding the right location and home) is getting established credit, income, and assets.
Lenders scrutinize their clientele much more thoroughly now. To get the best rates and terms it is wise to have:
- 700+ credit score
- Little to no debt (ie., credit cards, car loans, student loans, etc.)
- Established career whether it be employment, self-employment, or business ownership with traceable and stable income
- Excellent financial records (IRA statements, bank statements, W-9s and W-2s, several years of tax returns preferably done by a CPA, P&L statements if business, etc.)
- 20% or more cash down toward the purchase price of your home plus closing costs (approx. 1% to 3% of the purchase price)
- Cash in the bank left over after the purchase, roughly 2 to 3 months of living expenses (inclusive of your new mortgage payment)
