Real Estate New Year Resolution for a Buyer

If you’re anything like the average New Year’s Resolution-setter, you’ve probably already declared that 2012 will be your year. And that means different things to different people. It might be the year you pay off your credit cards, fit back into your “skinny” clothes, or finally take that dream vacation you’ve been eyeing.

Given the volatility of the real estate market over the last few years, my guess is that more than a few of you are also considering including real estate resolutions on the short list of things you want to take care of over the next 12 months.

Whether your stage of life renders you more interested in buying, selling, getting right side up - consider adding one of these real estate resolutions to your list:

1. Buyer Resolution: fix up your financials and buy a home. It’s no secret that the mortgage lending world is tough out there. But don’t let that stop you from buying a home in 2012. The name of the game is to prepare, prepare, prepare.

In particular:

• Pull your papers together: Spend January gathering up: your past two years’ federal tax returns and W-2s; your last two months’ pay stubs; and statements from bank and other asset accounts, like retirement accounts and investment accounts. You might also find it handy to have marriage and divorce certificates on hand, as well as the statements from any credit, auto or student loan accounts you hold.
• Also, start keeping a running file to collect and keep handy new stubs and statements throughout the year; when you find your dream home, your lender will ask you to refresh your application with the latest versions.
• Compile your cash to close: If you’re serious about buying a home this year, you’ve probably already started saving up - or at least know where and how you plan to access your down payment funds. Early this year, meet up with your real estate and mortgage brokers and do a double-check on how much cash you’ll need for your down payment and closing costs to buy the sort of home you’re looking for in a location you’d like.
• Also, touch base with your team on timing matters around any gift money or money from your own retirement accounts that you plan to use toward your purchase. You might need some lead time in order to draw your own funds, specific documentation of where the monies came from, or a couple of months for the money to sit and ‘season’ in your own accounts before the lender will greenlight the deal; the best practice is to make yourself aware of any such requirements as soon as possible.
• Have your mortgage pro run your credit report. Again, if you’re planning to buy this year, chances are good you’ve already pulled your own reports from the three bureaus. But as you move down the home buying timeline, it’s imperative to get your mortgage broker or banker to pull their versions of your reports, as that what the lender will go by.