2019: New Year, new you? How about this instead? 2019: New Year, new home! That has a nice ring to it! Many people dream of owning a home one day, and that dream can become a reality for anyone by taking the rights steps. There are many pieces to the puzzle of home buying, and these 4 pieces are ones that are often misunderstood, but that anyone wanting to own a home should know!
Lenders will be evaluating your credit history to determine your ability to repay your home loan. Do they only look at your credit score? No. There are several items that are reviewed in addition to your credit score. The number of open credit accounts you have, the length of time credit accounts have been opened, payment history on credit accounts, and the outstanding balance compared to the limit on credit accounts. Lenders will look for any credit events such as a short sale or bankruptcy. There are several mortgage loan programs available and they have different credit history criteria. Sitting down and reviewing your credit with a mortgage professional can help determine the best program that’s available for YOU.
Lenders will review your employment, including your last 2-year work history. Have you been with the same employer for the last 2 years? If so, that’s great news! Have you had employment changes in the last 2 years? If you said yes, that doesn’t automatically mean you can’t get a loan. The lender will need to review additional work history to make that decision. Did you recently start a part-time job or are you self-employed? Your qualifying income may be different than what you think. A mortgage professional can help you determine your income for a mortgage loan.
There are two pieces to the costs associated when the time comes to buying a home. The first portion is the down payment. A common misconception is you need to have at least 20% of the purchase price saved up to buy a home. That may not always be the case. There are programs available that have a ZERO down payment requirement. The second portion of the costs associated are called the closings costs. Typically, closing costs are fees charged by the lender and title/escrow companies. The good news… there are programs available to help you with the down payment and closing costs! Have I mentioned sitting down with a mortgage professional to determine what is available for you?
Buying a home is not impossible. Maybe a friend told you about their unpleasant experience they had when buying their home. Are all stories like that? Not at all! The mortgage industry is heavily regulated and has changed (for the better!) over the years. Changes have been made for a very important reason, to keep the best interest of the consumer in place. It’s vital that you work with a professional team to help you with each step of this process. It can take time from when you sit down to get pre-approved with a mortgage loan officer to the moment you receive the keys to your new home from your real estate agent. You know that saying “one size fits all”—well, one loan program does not fit all. Everyone has a different financial background and a mortgage professional will work with you to find the best program for you. With the right professional, it doesn’t take long to put the pieces together and go from dreaming of home ownership to getting the keys to your new home!
Mayte Castro, Mortgage Loan Officer
Mason McDuffie Mortgage NMLS# 1141