So, the Finish line for New Home Ownership is finally in sight? During this next six to twelve months we have serious instructions for you to take to heart. Work toward this goal as if You have specific coursework to complete for the best diploma of your future: the Deed to Your Home!
Now, Breathe! Keep doing the same responsible things you’ve been doing every week.
- Maintain an excellent work ethic. On the job 100%, NO EXCUSES!!! Work extra hours, second-third jobs when necessary. Be Ready to explain any gaps in your employment these last few years due to the recession: part-time work, wage decreases, sales which brought in extra cash. Document everything!
- Maintain Excellent Credit. Pay bills ahead of time. Avoid waiting so close that you risk a late charge. Get into the practice of recording the payment and prepare the check, ready to mail at least five days before the due date. ( I use Artificial Due Dates: pay one week before due date.)
- 1st Pay your rent/mortgage payment; 2nd installment, revolving, and credit card loans . At least two weeks before you actually close on your home be sure your downpayment is in your account. Note any money from family, lenders, sales, that gave you excess of your income.
- Firehose every bill from the lowest to the highest. Send something extra on your lowest debt every month. Roll that payment up into the next lowest and keep rolling until all debts are paid. Then, roll that payment into savings for your down payment. Do not worry about paying off credit cards or loans. Most lenders need to see you have maintained consistent payment history on your financial obligations. MORE IMPORTANT, be sure every payment is current, remembering that every Paid-In-Full debt is more cash toward your down payment and Monthly Mortgage allotment!
- Get Pre-Approved. Go head-on early to check your status for realistic loan amounts and monthly mortgage payments. Request a free Credit Report from Equifax, TransUnion, or Experian. Review your history looking for any discrepancy that might delay your Loan approval and clear it ahead of time. Work mortgage calculators with accurate numbers each month, always improving your debt-to-income ratios. You will need to provide current pay stubs (W-2’s and 401(k) statements, and bank statements, your last two years Federal tax return statements, alimony and/or child support records (may take up to 90 days to get from court).
- Get anxious! This is a normal adult thing to do. Millions of people have grown up, gotten jobs, and bought homes. You will too. It’s the American Dream. Don’t get ahead of your income and turn it into a nightmare.
- Make large dollar purchases, even with cash. That will deplete your available Total for a down payment and throw a RED FLAG to your loan officer.
- Neglect your Spending Plan homework. More than ever, keep close sight of every dollar coming in and going out. Absolutely NO Overdraws on your checking account! See if you can eliminate even more Leaky Vessels from your weekly spending to cushion new expenses in Home Ownership.
- Apply for new credit cards or any loan that will create a Credit Inquiry. Wait until you have stabilized your monthly mortgage payments…Yes, that means six to twelve months from your closing date!
- Settle for the minimum requirement. In Home Buying, you have too much to lose if you just slide by. Why set yourself up to fail? This is going to take conscientious effort just to get in the house; then, continued effort to never lose it. Getting in a house is similar to getting in a marriage. You win the contract, but now you spend even more energy and attention maintaining it. You have to do what you signed to do!
YOU can DO this!! Be cautious, wise, deliberate, and thorough in every area of planning. Create a Checklist and Timeline for what you want to accomplish and the date to be completed. Most Home Buyer Guides can provide these, but YOU need to tailor requirements to your personal
Lifestyle and income. Begin practicing —-TODAY!
National Education Center, a Non-Profit Agency dedicated to Getting the MOST people out of debt the FASTEST!