Build your green file: A green file contains all your important financial documents. You’ll need it to secure financing for your home. The typical green file should contain:
- Most recent paystubs covering a consecutive 30 days earnings
- Most recent 2 years tax returns (all schedules) with supporting
- If self-employed, in addition to personal tax returns, a signed YTDProfit/Loss statement and, if applicable, supporting business returns/K1’s
- Most recent 2 monthly or 1 most recent quarterly statement for allchecking/savings/investment/retirement accounts
- Copy of current photo ID
- If currently renting, landlord contact information or 12 months (cancelled checks to prove rental payment history)
- If currently a homeowner, copy of current mortgage statement
- If applicable, full copies of divorce decree, order of child support, bankruptcy papers
Check your credit rating: Your credit score will have a huge impact on what type of home you can buy, and at what price. Anything above 620 is considered good. A premium interest rate may mean a lower interest rate on your mortgage. Check your credit rating with a credit reporting agency such as: Equifax, Experian or Trans Union.
Be Careful With Your Finances: Now is not a good time to make sudden career changes or large purchases. You want to approach home buying from a position of financial stability.
Next Step: Choosing a Realtor