The topic of preparing finances is important, because it is the cornerstone of the residential home-buyers market. Far too often, before the market collapse, this topic was untouched — now people are seeing the value in the clarity provided. This article is an extension of the wisdom drawn from the market crisis, and a reminder is never out of style or excessive.

It is time to look for a new home. This is an exciting time, but can be stressful. It is important to know where you stand financially before starting the endeavor. The most important thing is to be sure that you are able to afford your new home. Remember when looking for a loan, it is important to not only provide information about your current income, but also your previous financial history.

There are many factors that will be used to determine your eligibility and the amount of loan. The first thing to collect should be any pay stubs you have available. Most institutions will want to see the past two years, at least, of income. These stubs will also show proof of employment. It is easier for someone who has a steady employment record to receive a loan. If you have had many job changes, be prepared to explain why. Bank statements are also looked at to show proof of savings and to determine any past history of bounced checks. Save all of your tax returns as added proof of income. This is especially important if you are self-employed or own your own business. The lender will also be interested in any investment portfolio you may have. If you are receiving alimony or child support, this can also be added to your income (make sure you have the court documentation of amounts received). We all know that your credit report will be examined as well. This report will list all current long-term and outstanding bills, as well as your payment history. Having this information with you when you are ready to apply for a loan will help to speed up the process.