Thursday, February 28, 2013

It’s never too early to start preparing for your approval

A common theme I see in denied purchase applications is members not positioning themselves to be approved for their first mortgage loan in advance.  I so often hear statements like "If I had only known about that earlier, I could have taken care of that by now."  But, after they do take care of the item and get their credit file in order, it may be too late to buy that starter home they had their eye on. 

CU Promise loans, VA loans, FHA loans, and Rural Housing loans are all great examples of loan programs designed to get people into homes with little or no money down.  Each loan program has varying qualifying standards but many look at the same qualifying factors such as credit score, debt to income ratio, loan to value ratio, and cash reserves just to name a few.
 
Here are a few tips that can help you put yourself in position to be approved to buy your own home:

  • Make sure you have at least three trade lines reporting on your credit report for at least 12 months – Open a share secured loan or a share secured credit card if you are falling short of the three trade lines needed.
  • Get your credit score up to at least 640 – Dispute any incorrect information reporting on your credit report and make sure the dispute has been resolved before starting the application process, pay your monthly bills on time, and clean up those collections.
  • Save money – Even if you are approved for 100% financing, you may still need to pay for closing costs or leave yourself with two months worth of cash reserves in the bank.
  • Employment stability – If using either self-employment or employment income to qualify for the loan, you will need to show two full years of employment history in the same line of work.
  • Get pre-approved for a loan before shopping for your home

It is an ideal time to take advantage of the current buyers’ real estate market while mortgage rates continue to stay low.  Call 1-800-418-1486 to speak with a Mortgage Loan Officer who will be happy to find the loan program that will best fit your needs.