Getting a Clear Financial Picture

Once you've decided to buy a house, it's very important to get a clear picture of your financial situation. You need to understand just how much money you have, and how much you can spend. Here are some things that will help you generate and clarify this financial picture:

• Obtain a Credit Report. You can get a free credit report online these days, and it will tell you exactly what lending institutions think of you. You can also see if there are any discrepancies and clear up any problems that may exist.
• Analyze your financial situation by figuring out where all the money is going. How much money do you make each month? How much do you spend? Where is the money going? Develop a budget so you know where you stand.
• Adjust your budget to include mortgage payments, as well as property tax and maintenance costs on the new property.
• Assemble the financial information that the Mortgage Company will ask for. These things include Income Tax returns from the past three years, pay stubs, records of any supplemental income etc.
• Pay off any debts that you can. The less debt you have the easier it is to get a Mortgage.
• Do not incur any new debt. Mortgages are based on debt to income ratios. The more debt you have when you apply for a Mortgage the worse your chances are. So don't take on any unnecessary debt before applying.