Fun Little Things You Should Do Anyway

Hey you!


Check it out. These are FLTYSDA even if you're not in the market to buy a home. I'm jumping the gun here on story time a bit cause you don't run into this till you need to go thru your bank/lender but it's good practice anyway:

1. Keep your bank statements, credit card reports and any other financial activity organized and up to date. The lender or bank will want a copy of any and all assets to your name. Usually not credit card reports, but checking and savings statements for sure.
2. Keep your paystubs, they're documentation that you actually work somewhere and get paid. I've been asked for paystubs from 2 months ago. If your paystubs are like mine w/o the company name, you may need to scan in your actual check, or a check stub.
3. Your taxes should be filed away, have a copy of your federal and state tax forms with your corresponding W-2's.
4. When you write out your deposit slips, make a copy for yourself, or note what you're depositing. This is especially important because deposits $400 and larger need to be documented to show they're legit. I have a few deposits where I had to go back to the bank and ask them because I could not remember what combination of check/cash I put in. Luckily BOH scans your deposit slip along with your checks so I was able to show where the deposit came from. If you cannot prove your large deposits, the feds won't back you and that account does not get included for your assets toward a loan.
5. Credit. You need it. The better your score, the better interest rate you can get. Sometimes you can buy points for a lower interest rate, but with a better credit score, and more assets, you can get that same interest rate for thousands less. TransUnion, Equifax, and Experian are the three, you can your free credit report once a year from here www.annualcreditreport.com. Your credit history (comprised to credit cards, loans, etc) might not give you your score but it will give you a good look at if you pay on time, how many lines of credit you have, etc. The lender told me the magic number is about 5-6. Without proper credit history, your credit score will suffer like mine. My credit score is good not excellent due to lack of history, even though I have no delinquencies. Everyone's case is different, but the more credit to your name, the better. You can write to credit card companies to raise your limit as well if you need to. If you find yourself lacking credit don't fear getting another credit card UNLESS you plan on not paying it off (not a swell idea), you are highly in debt with other cards, or plan to never use it. The key word is that they look at history. Start early, use your card where you might use cash sometimes and just pay it off in full. This magic number will either haunt you, or accompany you through life, start early.
6. Budget. I will admit my budget is very loose. But it's better to have it written down or in a program somewhere so that on the rare occasions you document your spending, you can see where it's going. Try to allot certain amounts for things like going out, clothes, entertainment and see how well you can stick to it. Even $5 here and there goes a long way. Bring home lunch, rent a movie, share food, eat to be satisfied and not stuffed ( you might even lose weight doing that too).
7. Don't wait forever. If when you decide to buy the interest rate is super crappy, justify reasons to hold off. When you find the place you want, you have to move on it. You can't hesitate on property. If you love it enough to suffer a mortgage that means someone else might too. There's a luck factor in there but your best bet is to make your own luck and be proactive. Browse listings, contact a realtor (I used and recommend Christina Nishiyama) to make appointments, or go to open houses.
8. Get pre-qualified at the least before starting your search. Work with your realtor and call a loan officer. I used Primary Residential Mortgage and talked to Nelson Oyadomori. Pre-qualification will give you a good idea of what you can really afford. The initial call will take about 10-20 minutes of your time. The loan officer will check your credit history (see #5), and verbally obtain your monthly income and assets. Don't lie. If you move forward on a property you will need to be pre-approved and that is where they will start collecting physical proof (paystubs, statements, etc) of your finances. The best thing about pre-qualification is that it keeps you in check. You know what your price range is and can narrow down the properties you want to see saving time for not only yourself, but your realtor!
9. Be patient. Breathe deep. Someone is preparing to lend you a lot of money. They're gonna want it back with interest. I hope you made that budget and are ready to plunge. Just think, all the cool kids are doing it. Like me :)