Buying a home is easy with YELLOW

Before you start looking for a home, it's crucial to understand how much home you can afford. Begin by getting a clear picture of your income, debt, and savings. This will not only help you determine your budget but also improve your chances of getting approved for a mortgage.

FINANCING

Most people finance their home purchases through a mortgage. Lenders will thoroughly review your financial history, looking for consistent income and spending habits. Ensuring your financial records are in order before applying can make the process smoother.

WHAT LENDERS WILL LOOK AT

Tax returns and W-2s: Minimum of the last two years.
Pay stubs: At least the last three months.
Bank statements: At least the last three months. Avoid overdrafts and be prepared to explain any unusual transactions.
Gift funds: If you receive money from a family member, you'll need to fill out a form explaining the gift and include their signature.
Student loans: Provide statements detailing your loan obligations.
Investment accounts: At least three months of statements, especially if you plan to use these funds for your home purchase.
(Note that first-time homebuyers can withdraw up to $10,000 from an IRA for a down payment without an early withdrawal penalty, though taxes on gains may apply.)
Previous residence payments: Document your monthly payments for your previous residence. Renters usually need to show one year's worth of rent payments.

Start getting your financial documents in order now. Having these in place will help speed up the home buying process.

YELLOW SAYS...

Here's a very important tip for getting a mortgage: Do not make any changes to your financial situation!

The mortgage company wants to see consistency. For at least three months before applying for a mortgage and all the way to the close:

- Don't make any big purchases.

- Don’t make any big in- or out-flows from your accounts.

- Don’t apply for other loans or credit cards.

- Above all, don’t change jobs.

Intro

What can you really afford?