What do potential home borrowers, especially first time home buyers need to do before getting a mortgage? Today, there are so many factors at play: your job, how you are paid, money in the bank, your monthly debt payments, your credit history, your credit scores, etc. Here is a summary of what you should be doing in my professional opinion before you buy a home to maximize your buying power

• First and foremost, obtaining a three bureau credit report with your credit scores from all three bureaus. Please realize that a mortgage professional can obtain this for you more affordable than you can on-line. Second, they can give you very valuable advice. Third, your credit score is different when I pull it than you pull it from the credit bureaus directly and my score matters the most!
• Follow the advice of your mortgage professional about your credit and credit scores. Your credit score is a “game” and you must know how to play the “game”.
• To avoid becoming a future statistic, analyze your current spending patterns for the last 3 months. Keep tally of every dollar spent for the last 3 months. Good free tools available are www.mint.com and www.wesabe.com.
• Then, create a budget or spending plan based on your spending for the last 3 months. This is where you prioritize your financial decisions every month, week and day. What’s most important to you, that daily Vanilla Latte or saving money for a worthy goal? Your decision.
• Begin saving money by paying yourself FIRST.
• Determine your monthly budget for a house payment.
• Then discover if you can afford that house payment BEFORE you own a home. Here’s how: Let’s assume you pay $1200 a month in rent; but you want to buy a $250k house which will require a monthly payment of $1750 or so. When writing your rent check for $1200 on the 1st of every month, write a second check to yourself for $550 and put it in your savings account. If you can regularly and comfortably do this then you should be able to afford the mortgage. What a relief it would be if you knew this in advance!
• If your income consists of commissions you must have a 2 year history of receiving commissions for us to consider your income stable.
• If you are self-employed you must be so for 2 years.
• Realize that if you are a 1099 employee or contract employee, you are self-employed and you must be so for 2 years.
• If you receive large bonuses or overtime income and we need to use this income to get your mortgage approved, we typically need a 2 year history of this income too.

Information provide by:
Lonnie Glessner America’s Mortgage LLC
P.O Box 271533
Littleton, Colorado 80127
Office: 303-993-2367
Fax: 303-993-2358
Cell: 303-881-6374
Lonnie@EndingFinancialInsanity.com