Am I ready to finance my home purchase? Going back a bit to our previous post, we have talked about the preparation we should have before purchasing a property, especially a financed one. This time we will discuss the purchase of a property with financing.

¿What is financing?

Acquiring a property is not an easy task. Specifically, if we do not have the money to do it in cash, we consider applying for financing. Real estate financing is obtaining funds to buy a property, using a commercial bank, savings association, employees credit union, etc.

Before we apply for financing

Here we explain the aspects to consider before submitting your application.

– Planning: Having a well-formulated plan helps us to explore convenient options. Also, to anticipate the influent factors when applying for financing.

– Marital status: If you are in the process of getting a divorce or if you have already done so, but your documentation does not reflect it, get them in order.  If you are in a common-law marriage, certify it; if your partner is a co-signer and co-owner of the property to be acquired.

– Financial footprint: It is the trace left by your financial transactions. It represents your identity in the world of buying and selling products and services. It also provides an idea of your credit history and whether you are a good candidate for a loan or not.

– Credit Record: This is a report that summarizes a person’s financial history. When you are financing the purchase of a property for the first time, you must have a good credit record score.

Self-Employed, ¿What do i do?

If you are self-employed and paid in cash, we recommend you open a bank account to start or increase your financial footprint, while building your digital credit identity.

– Payment capacity: Amount of cash available each month to pay our monthly responsibilities. You calculate it by subtracting total expenses from the monthly income. By defining our payment capacity, we will be clear about our money management.

– Debt capacity: Maximum amount of debt that an individual can assume without having financial solvency problems.

Now that you know the steps before financing your home purchase, you may begin exploring your options.

We would like you to tell us about your experience and leave us your comments or doubts, always a pleasure to serve you.