Many new buyers shy away from jumping into the real estate market due to their uncertainty about the buying process. A specific concern tends to be mortgage qualification.
The mortgage process can be scary, but it doesn't have to be!
In order to qualify in today’s market, you’ll need to have saved for a down payment (the average down payment on all loans was 11% last month, with many buyers putting down 3% or less), a stable income and good credit history.
Throughout the entire home buying process, you will interact with many different professionals, all of which perform necessary roles. These professionals are also valuable resources for you.
Once you’re ready to apply, Freddie Mac suggests following these 5 easy steps:
- Find out your current credit history & score – even if you don’t have perfect credit, you may already qualify for a loan. The average FICO Score of all closed loans in September was 731, according to Ellie Mae. There are loan programs that serve buyers with FICO scores in the 600's. A lender can help you with this or visit www.AnnualCreditReport.com to get your free credit report.
- Start gathering all of your documentation – income verification (such as W-2 forms or tax returns), credit history, and assets (such as bank statements to verify your savings).
- Contact a professional – As real estate agent, I can recommend a loan officer that can help you develop a spending plan, as well as determine how much home you can afford.
- Consult with your lender – he or she will review your income, expenses, and financial goals in order to determine the type and amount of mortgage you qualify for.
- Talk to your lender about pre-approval – a pre-approval letter provides an estimate of what you might be able to borrow (provided your financial status doesn’t change), and shows home sellers that you are serious about buying!
Do your research, get advice from professionals, stick to your budget, and be sure that you are ready to take on the financial responsibilities of becoming a homeowner.
Call/Text me at 703-626-2226 for more information about the mortgage process or for a lender referral.