PREPARATION 2.1 Getting Started. Purchasing a home is a very exciting time. For qualified buyers, mortgage terms have rarely been better. The real estate and lending industries have changed substantially over the past several months and fixed rates are low and loan programs are plentiful. It is still possible to receive extremely attractive terms on low or even no down payment loans right now. 2.2 Financial Objectives. Before you speak with a lender, it is a good idea for you and anyone who will share in the ownership of the home to discuss your financial objectives in this purchase. How much do you want to spend up front? What is a comfortable monthly payment for you? Remember, there can be a big difference between what a lender will qualify you for and what you can comfortably afford based on your lifestyle. 2.3 Build Your Green File. When preparing to speak to a lender, you should first organize your personal financial records. There are exceptions to everything, but most likely the lender will need to see your most recent pay stubs, W-2 forms and bank statements. Tax returns for the past two years may be required depending upon the specifics of your financial situation. 2.4 Consider Your Credit Rating. Another means by which lenders gauge your trustworthiness as a borrower is through your credit rating. This indicates your credit history, which includes crucial financial information such as the number of open loans, open lines of credit, delinquencies and the punctuality of your past payments. You are welcome to check your own credit prior to talking with a lender. However, be careful if you choose to try to improve your credit or make any financial changes prior to applying for a loan. For example, after reviewing your credit report, you may choose to pay off a credit card to improve your credit score. To a lender the credit card balance and credit score may have been fine, but losing access to the money you had in the bank may hurt your chances of obtaining your preferred loan program. A good lender will check your credit for a nominal fee, or perhaps at no charge, and provide guidance if anything could be done to improve your financing terms. This is yet another reason to begin the financial preparation process early. 2.5 Treat Your Credit Like Gold. Credit ratings are very important because they often determine whether or not you will be approved for a loan and what your interest rate will be. Thus, you cannot take your credit seriously enough. It is suggested to check your credit reports at least once a year or before making any major purchases to ensure the accuracy of the information. You can check your credit rating by contacting a credit reporting agency such as Equifax (equifax.com), Experian (experian.com) or Trans Union (transunion.com). Or you can have a lender check your credit for you. For more information, if you have any questions or you would like to have a lender recommended to you, please contact Garry and Mary at any time.