Sunday, July 31 , 2016, 1:40 am | Fog/Mist 63º

  • Follow Noozhawk on LinkedIn
  • Follow Noozhawk on Pinterest
  • Follow Noozhawk on YouTube
 
 
 
 

Business

Tim Taylor: Dos and Don’ts for Preparing to Buy a Home

If you’re considering purchasing a home, here’s what you need to do.

Tim Taylor
Tim Taylor

Make a list of items most important to you. For example, the type of home: a single- or multi-family unit, the number of rooms, the location and the proximity to schools, if you have or plan to have children.

Also, think about how long you want to reside in the home. Increasingly, homebuyers tend to move in and then move up.

Prepare yourself financially. Avoid any major purchases until after closing, regardless of your credit standing. Any increase in debt-to-income ratio reduces your purchasing power. Things such as an expensive monthly car payment could make a bank decide you cannot afford the home.

Also, you want to preserve any cash reserves you have. Banks prefer a consistent cash cushion of approximately three times the amount of your monthly payment. Review your credit reports at the major credit bureaus (Equifax, Experian and TransUnion) and search for anomalies. Avoid consolidating bills and closing credit cards.

This can lessen your cumulative credit history and lower your FICO score. Don’t change jobs. Lenders prefer that you’ve been working at least two years for your current employer.

Get the necessary paperwork in place. When you apply for a loan, you’ll be asked to provide the last three months of deposit account statements for bank accounts, stock or mutual fund accounts, pensions and other retirement accounts such as a 401(k), IRA or ROTH IRA. Other important documents include tax returns and W-2 forms for the last two years and, if applicable, divorce papers. If you’re renting, prepare copies of the last 12 months of rent payments.

Get pre-approved for your loan before you begin house hunting. Pre-approval will determine how much home you can purchase. It will also increase your bargaining position. Getting pre-approved sets you apart and signals to the real estate agent and the home seller that you are dedicated and serious, and can afford the home you want.

If you would like to learn more about preparing to purchase a home and getting pre-approved, please call me today at 805.898.4222 or click here.

Tim Taylor is an area manager for Prospect Mortgage.

Reader Comments

Noozhawk's intent is not to limit the discussion of our stories but to elevate it. Comments should be relevant and must be free of profanity and abusive language and attacks.

By posting on Noozhawk, you:

» Agree to be respectful. Noozhawk encourages intelligent and impassioned discussion and debate, but now has a zero-tolerance policy for those who cannot express their opinions in a civil manner.

» Agree not to use Noozhawk’s forums for personal attacks. This includes any sort of personal attack — including, but not limited to, the people in our stories, the journalists who create these stories, fellow readers who comment on our stories, or anyone else in our community.

» Agree not to post on Noozhawk any comments that can be construed as libelous, defamatory, obscene, profane, vulgar, harmful, threatening, tortious, harassing, abusive, hateful, sexist, racially or ethnically objectionable, or that are invasive of another’s privacy.

» Agree not to post in a manner than emulates, purports or pretends to be someone else. Under no circumstances are readers posting to Noozhawk to knowingly use the name or identity of another person, whether that is another reader on this site, a public figure, celebrity, elected official or fictitious character. This also means readers will not knowingly give out any personal information of other members of these forums.

» Agree not to solicit others. You agree you will not use Noozhawk’s forums to solicit and/or advertise for personal blogs and websites, without Noozhawk’s express written approval.

Noozhawk’s management and editors, in our sole discretion, retain the right to remove individual posts or to revoke the access privileges of anyone who we believe has violated any of these terms or any other term of this agreement; however, we are under no obligation to do so.

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made through PayPal below, or click here for information on recurring credit-card payments.

Thank you for your vital support.



Daily Noozhawk

Subscribe to Noozhawk's A.M. Report, our free e-Bulletin sent out every day at 4:15 a.m. with Noozhawk's top stories, hand-picked by the editors.

Sign Up Now >