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Contact EXIT Team Realty

If you have any questions or need more detailed information, please feel free to contact us via phone at 401.349.5000 or fill out the form to let us know how we can help with your real estate needs.

Office Location

375 Putnam Pike Ste 35,
Smithfield, RI 02917
Phone: (401) 349-5000
Fax: (401) 349-5099

Getting Your Finances In Order

The most crucial step in starting your search for a new home is having a clear idea of your financial situation. By getting a handle on your income, expenses and debts, you'll have a much better idea of what you can afford and how much you'll need to borrow.

For lenders to verify this information, though, they're going to need to look at your financial records. It is also important to remember that you should include records for each person who will be an owner of the house. So before you even visit the bank, make sure you'll be able to provide copies of these important documents.


Lenders will want to see:

Paycheck Stubs

Remember that lenders are most interested in your average income. Not only will they want to see this month's paycheck, but also how much you've been making for the past two years. Steady employment is also more attractive to lenders, so if you've been hopping from job to job, be prepared to discuss the reasons why.

Bank Statements

In order to qualify you for a loan, most lenders will also ask you for copies of your bank statements. Ideally, they'd like to see a steady history of savings--or at the very least, that you're not bouncing checks every month.

Tax Records

It's always a good idea to save copies of your tax returns, especially if you're self-employed. If you own your own business, it's important to note that lenders generally consider your income as the amount you paid taxes on--not the gross income of the business.

Dividends & Investments

Lenders will usually consider long-term investment dividends, as well as your investment portfolio, when evaluating your income.

Alimony/Child Support

If you receive steady payments as part of a divorce settlement or for child support, you can also include this as part of your gross income. Just remember that lenders will want to see a copy of your divorce/court settlement verifying the amount of the payments.

Credit Report

The lender will access your credit report as part of the loan application process. The report lists all of your long-term debts, as well as your payment history. In general, lenders will give you a copy and offer suggestions on how to improve your credit to qualify for a home loan.

Create a budget

The way to get and keep your finances in order is to develop a family budget. Use receipts from the last 6 months to create a budget. One advantage to this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

Reduce your debt

Generally speaking, lenders look for a total debt load of no more than 36 % of income. Since this figure includes your mortgage, which typically ranges between 25 % and 28 % of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 % and 10 % of your total income. Any loan that has less than 10 months left on the term is not considered a part of your debt to income (DTI). There are also new flexible guidelines and loan programs available to help borrowers with higher DTI levels.

Get a handle on expenses

You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.

Increase your income

If you are thinking about increasing your income by taking a second, part-time job to get your income at a high-enough level to qualify for the home you want. You have to make sure that the 2nd job is steady employment in the same field for at least the previous year to qualify as income.

Save for a down payment

Although it’s possible to get a mortgage with only 5 % down—or even less in some cases—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving 20 % of the down payment. There is some 3-5% down programs and 100% financing is available depending on your credit scores. There are single and two family programs with 0-20% down.

Create a house fund

Don’t just plan on saving whatever’s left toward a down payment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.

Keep your job

While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate. If you are self-employed you may qualify for a stated income loan or an income verification loan.

Establish a good credit history

Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance prompt

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