Before you start shopping for your property, it is a good idea to make some preparations.
Build Your Green File.
A green file contains all your important financial documents. You will need it to secure financing for your property. The typical green file should contain:
- Financial statements
- Bank accounts
- Investments
- Credit cards
- Auto loans
- Recent pay stubs
- Tax returns for two years
- Copies of leases for investment properties
OBTAIN A PRE-APPROVAL
You can benefit in several ways by consulting with a lender or mortgage broker and obtaining a pre-approval for financing before you start house-hunting. Not only will this alleviate potential issues that can arise when you are already involved in a purchase contract, but you’ll also be able to set a budget and learn the maximum amount that you can borrow. This helps you “stay between the lines” while shopping for your next home, saves valuable time and can also prevent heartbreak when you find “the one”, only to later find out that it is unattainable for you.
Sellers tend to be more willing to negotiate with those who have proven that they can obtain financing.
Be Careful With Your Finances.
Now is not a good time to make sudden career changes or large purchases. You want to approach your property purchase from a position of financial stability.