Okay, you truly feel that you could be in the market to purchase a home in the next year, possibly in the next 6 months, or you decided to look into it now. You feel like it shouldn't be that hard, that you have decent credit and that you can prove your income. In reality, after doing mortgages for over 15 years, it shouldn't matter what you think. With the ever changing world of mortgages, you should try to be semi prepared before jumping right into it. Especially if your credit is less than perfect.
So, what should you do? I personally recommend that you speak to a mortgage professional no matter how long that you are away from purchasing a home. Keys to home ownership sometimes take some elbow grease and can put a stress on your loan approval if you aren't prepared ahead of time. Stop listening to those that say having your credit pulled can lower your credit scores. That's only if you do it consistently in a certain time period. It doesn't hurt to be prepared prior to even applying for a mortgage, which could save you hundreds of dollars.
Here is a basic list of items that you could start to work on :
- drivers license -- Moved to a new state just recently? You should make sure that your driver's license has your new updated home address.
- large deposits -- Try not to deposit large sums of money into your bank accounts outside the norm. Work pay is okay. Again, anything outside the norm, make sure you keep a paper trail.
- solid 2 year work history -- Make sure that you don't have large gaps of employment, unless you were sick or maternity leave. And don't quit your job during the mortgage process.
- proof of rent for at least a year -- Always pay at least by check or money order and keep the copies of these.
- prior collection account/charge off/or judgment -- if you are deciding to go into some sort of payment arrangement. make sure that you have at least 6 months of payments prior to signing a purchase agreement.
- Purchasing new items -- If you are serious about buying a new home, don't go buying new things, such as a new car. Especially if you are in the middle of a mortgage process, trying to get approved for a mortgage.
Overall, you just want to be prepared and somewhat educated on the process of buying your new home prior to searching for that home. There are several reasons why. Two that stand out :
- Just piece of mind, because once you apply for a mortgage, there won't be any surprises or delays.
- A delay in your approval could make you miss your commitment date or if you locked into your rate at time of application, you could lose your rate.
The Mortgage Process Series :
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For more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
Jeff
may we add to bring your resident alien cards (for those that are not US Citizens)
Jeff,
This post is so simple but highly valuable inasmuch as it lays out in a clear fashion what a consumer needs to do...I hope many read this and take your advice!!! Thanks, Fran
KRIS..... I am seeing so many people that call up in regards to buying a house and they want to buy now. And more than half of them don't have perfect credit and basically need to get some things straightened out prior to even looking. I work on so many files per month that could be easier if that client would have just looked into it at least 6 months prior to buying. Thanks for the feedback...and I haven't forgotten about our call. ;o)
DON..... that was one thing that came to my mind after I submitted this. And thanks for the compliment.
JOE.... yes, I could add that, but I didn't want to make it too long. Just for the consumer to get the idea. thanks for your feedback.
JASON.... I agree... hence one reason why I decided to do this and possibly do a quick little mini series. And yes, we agree, the more familiar with the documentation, the easier the process. thanks
MATTHEW R. ..... I am not sure that I understand 100%? I guess get more in detailed for what the loan officer needs to get from the client for FHA loans?
FRAN...... Yes, a basic layout, but valuable. thanks for stopping by and for the compliments.
excellent Jeff, thank you... seems like common sense but I miss this stuff too from time to time reminders only make us better
Rick
This is terrific info Jeff... especially for first time home buyers. May I have permission to link to this on the Finance page of my website?
It was great catching up with you yesterday!
Jeff - such a timely post...I was just asked this question yesterday : )
RICK.... common sense which not everyone has. And yes, it's a great reminder even for myself. Thanks for the compliment.
LARRY..... yes, that amazes me. And when you ask if they have followed any of your list and they look at you funny, it can be frustrating. But having it in front of them should definitely help. thanks for stopping by.
JENNIFER..... yes, you may have permission. You can use anything of mine anytime. And yes, it was great catching up with you yesterday. Thanks for the polite compliment.
SANDRA.... that is timely. Hope you will be able to pass some of this information onto them. thanks
MELINA..... thanks for the kind words and thoughts. And I added what you said about quiting your job in the middle of the process. I had that happen with a client 4 months ago and we barely made settlement because of it.. thanks for your input and feedback.
MARC..... so true, that this list is good for not only buyers, but for realtors to understand the process. Thanks and thanks for the compliment.
DIANE..... I agree.... how about writing a book. ;o) And sorry to hear about that one specific purchase not closing because he bought a motorcycle.
CAROLE..... my pleasure. It's nice to share things that others wouldn't have thought of otherwise. Just as I learned some basic things from you. thanks
JOAN..... definitely, I have no problem with you using this. As long as my name is attached to it or that I get credit for it. Thanks for asking.