If you’ve been thinking about investing in real estate, here’s what you need to do before heading out to shop for properties.
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Create a financing plan
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What’s your current income?
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How much do you have in savings?
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Can you get a mortgage loan?
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Will you pay in cash?
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Keep your credit healthy
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Request a copy of your credit report.
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Dispute any errors.
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Pay all your bills on time.
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Pay down high-interest debt first.
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Be strategic about opening or canceling lines of credit.
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Get pre-approved for a mortgage
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You’ll need the following in order:
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Personal documents
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Tax returns
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Proof of income
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Proof of assets
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Summary of debt
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Do your homework
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Compare different mortgages from different lenders.
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What interest rates are they offering?
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How much will they lend you?
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Check in with your current bank and others, too.
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Establish liquid funds
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You’re going to need some cash on hand to buy, if only for a down payment and closing costs.
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Don’t forget about renovations and repairs.
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If you’re flipping a house, you’ll need to consider your monthly cash flow.
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Secure a backup source of cash.
