Once you have decided you are ready to buy or sell, putting your financial picture together is part of the process.   Here is a quick guide to helping with this process.

For Buyers

While in the process of shopping beautiful homes on-line, finding out what your credit score is and just what you can afford.  Have you heard the phrase “champagne taste on a beer budget”?  Although standards change with the financial market a credit score of at least 620 is necessary for a FHA or VA loan, a higher credit score of 720 for conventional financing and a better interest rate.  If you credit score needs work, contact a local lender or real estate agent for a referral.  A good lender can tell you what you need to do to repair or improve your score in the next 6 months.  Things like paying off debt, savings and making payments on time.

Once your credit score is assured, it’s time to get organized.  You will need to gather the last 2, or 3, years of income taxes, pay stubs, 2-3 months of bank statements.  The lender you choose will have a list of items the underwriters require will require from you

For Sellers

When getting ready to sell your home, the financial process is also important.  Are you selling in order to purchase another home?  If so, the above also applies to you. Making sure your credit score hasn’t been damaged is the first step.  Insuring you will  receive enough proceeds from the sale of your home to payoff an existing mortgage, in addition to down payment and closing costs for a new home.

In addition to funds needed for payoff, down payment & closing costs, you may be required to make minor repairs and improvements to the home you are selling.  There are improvements to be considered prior to marketing, perhaps fresh paint or new carpet.

Repairs may be required after the buyers’ home inspection.  These repairs could be high radon, furnace repairs, termites, along with plumbing or electrical repairs.  A few sellers opt to have a home inspection performed prior to marketing, less surprises in negotiations.