Before you start searching for a property to buy in Cardiff, Encinitas, Carlsbad, Oceanside, Vista, or San Marcos, it’s wise to take some time and get your finances in order. Here are some tips:
Try to reduce your debt as much as possible. Lenders usually do not want your total debt to be more than 36 percent of your income. Since this figure includes your mortgage which is usually about 25 to 28% of your income, the rest of your debt should be no more than 8 to 10% of your income. That 8 to 10% includes car loans, student loans, and credit card balances.
If you need to, try to increase your income. That’s what lenders look at. Look for a second parttime job or ask someone else to go on the loan with you. You need to get your income at a high enough level to qualify for the home you want.
Save for a specific downpayment. Be aware of the lending programs out there, find out exactly how much you need to put down, and establish a fund to save for that amount.
Finally, establish a very good credit history. Your credit score may easily make or break your loan application. If you don’t have a credit card, get one and make all of the payments by the due date. Be sure to pay off the total balance promptly on all of your bills.
If you follow these steps to prepare to organize your finances, then your meeting with your lender when your are ready to buy a home in Cardiff, Encinitas, Carlsbad, Oceanside, Vista, or San Marcos, will be a productive one and you’ll be ready to go with a pre-approved letter.