Understand Your Situation
Are You Ready?
This is a deliberate process. It really isn't that complex. Here are some pointers.
Mental Readiness: Like any major decision you want to be sure you really want to do this. If there is some doubt, wait until you and your family are comfortable with moving forward.
Credit Report: Take a look at your credit report to correct any errors. While the score you get from free credit services will not be the same as the Home Loan Credit Report, this will give you an idea where you stand. Your credit report and score is a major factor which determines the cost of your loan.(What Is In Your Score)
Bank Accounts: Lenders will look at your bank account. Be ready to explain transactions over $500 for the past two months.
Tax Returns: Most lenders will require the past two tax returns. Make sure they are filed and if you owe taxes make sure you have started a payment plan.
Before You Close: It's usually best to delay any major purchases until after you close your loan. This is for two reasons. You may need to show the lender extra cash reserves in order to close. Some lenders may want an explanation for purchases over $500. If you're planning any changes to your income source such as starting a new job or starting your own business, it's best to do so after your loan closes.