Buying that first home can be exciting, but also a little confusing and stressful. It’s always a good idea to work with an experienced loan officer as part of your home buying team. He or she will be well-qualified to answer questions and provide mentoring and solutions to make the experience as comfortable as possible.
Here are 5 things first-timers should be prepared to address in the mortgage qualifying stage of the process.
Credit Scores — Know your credit scores, understand how credit scoring works and where possible, take steps to get your numbers as high as you can before you apply for a loan. Your score will play a big role in determining how attractive the terms of the loan can be.
Housing & Rent Payment History — Be prepared to account for where you’ve lived in recent years and how promptly you’ve paid your monthly rent. Lenders will pay close attention rent payment history. It’s proven to be a very reliable indicator of whether a person is likely to make mortgage payments on time.
Employment History — Lenders generally like to see at least 2 years of stable employment. They will also evaluate the type of pay (salary, hourly, commission-based, subcontractor) and assess a prospect’s amount of pay versus debts.
Amount/Source of Downpayment — Lenders will want to know how much the downpayment is, and where those funds came from. Gifts from family or others is acceptable, but there are certain guidelines that must be followed, based on the type and size of the loan.
Outstanding Financial Issues — For most young adults, this area is primarily student loan debt. While the amount of money owed can be a loan approval challenge, many mortgage programs have relaxed their formulas on how student loan debt is evaluated. Your experienced loan officer may also be able to find a variety of options for home buyers with sizable student loan debt.
The Team Move website blog has more information for first-time home buyers in this article. You can also always contact the Team Move Office in Sanford to get answers to your mortgage questions, by calling 919-777-0114.