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Maintaining A Paper Trail
“I’M
CURRENTLY RENTING, BUT I’M PLANNING ON BUYING MY FIRST HOME WITHIN THE
NEXT YEAR. BESIDES MAKING SURE MY CREDIT IS GOOD, IS THERE ANYTHING ELSE
I NEED TO DO?”
First of
all, good for you for planning ahead! Making sure your credit is good is
an integral part in buying your first home and getting your first
mortgage. Beyond maintaining your credit, though, there’s another very
important step you need to take: You need to keep a “paper trail” of
rent payments for at least twelve months. If you have roommates and
you aren’t the person responsible for paying the rent, the key to
maintaining a paper trail is to pay by check. Since your potential
lender will require proof that you’re able to make regular payments (and
make them on time), you won’t have any kind of paper trail if you pay by
cash or money order. If you do pay by check, you will have either the
cancelled checks or bank statements as proof. Similarly, if you pay the
rent directly to your landlord, you should pay by check as well to
maintain your paper trail. Some lenders may accept a VOR (Verification
of Rent, which is a statement of rental payments) signed by your
landlord, but not all lenders will accept this. Finally, if you pay your
landlord directly and by check, be sure that your checks are being
deposited in a timely manner. Otherwise, your lender may consider those
payments as being late—whether it’s your fault or not. ∆
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