Top 4 Things You Can Do To Financially Prepare For A Real Estate Transaction
Most of us are bombarded with contradicting real estate news headlines on a daily basis. One source will tell you the real estate market is a bubble that is about to burst and the next will tell you we are seeing record home sales. If the last few years have taught us anything, it is that the future is increasingly hard to predict. So, how does one prepare for the unknown, and especially when it comes to buying or selling a home? Here are a few important foolproof steps to help you in whatever financial situation you are in.
Step 1: Consult with an experienced, local mortgage advisor & real estate agent. Seriously, do this step before you scour the internet for ways to improve your credit score. Just like the real estate market, the rules of lending are constantly changing. Consulting with an experienced team of people who can truly help you strategize your individual situation will bring you closer to your goals in much less time, and it may even save you money! Even if you think you won’t be doing any real estate transactions for another 5 years, schedule a consultation now!!
Step 2: Put your goals first. It’s easy to get distracted with day to day needs when it comes to budgeting. Writing your goals down and placing them in areas where you will read them multiple times of day will help you stay focused. Don’t open any new lines of credit unless your mortgage advisor specifically recommends it. Before you purchase something, ask yourself if it is a need or a want. If it can wait, then let it.
Step 3: Keep your bank accounts & spending consistent. Set up a feasible transfer to your savings account from each paycheck and then leave it there. Avoid the urge to transfer money back and forth from checking to savings all of the time. When you are ready to buy a home, generally 2 months of bank statements will need to be submitted for underwriting review. Large deposits and transfers will need to be accounted for. You won’t be able to use your cash stash under the mattress for your down payment, the funds will need to be ‘seasoned’ in your bank account in order to use them.
Step 4: Organize & gather your paperwork. The mortgage application process can be lengthy & time consuming, but don’t be discouraged. Having your financial paperwork organized can make both buying and selling real estate a much better experience for you. Keep your recent paystubs and bank statements in an organized central location. If you have completed home repairs, keep the receipts and warranty info. File and pay your income & property taxes on time and keep the official returns on hand.
Don’t wait to get started with step number 1. Give us a call, we are here to help and will put you in touch with an amazing, experienced Arizona lending team.