First of all, you should at least be aware of the extension of the First-Time Homebuyer $8,000 Tax Credit and the new addition of the “Repeat”, “Move-Up”, “Step-Up”, “Current” homebuyer $6,500 Tax Credit. If not, please read my previous blog posts for details or simply google it or go www.irs.gov.
Next, see if you can qualify for a loan. Lenders are lending! Interests rates are still low!
These are the most common questions a mortgage lender (banker) will ask to get you qualified:
- Work History. (More than two years the better) – If you just recently started a job, they will more than likely need a letter from your employer verifying your employment and income. Will require your W2/1099 – preferably last two – three years.
- Self-Employed (Woosh) This is a hard one. For conventional loans or lets say bankable loans they require two years of tax returns. Some may be a more lenient depending on your business. If you can’t get a conventional loan, there are other solutions.
- Your credit history. If your credit score is at least a 680 you have a very good chance of receiving a loan. If it’s less don’t fret. Fix your credit! Often times, you can fix it yourself and see a dramatic increase in no time. Just move forward! ** For example, try to keep your balance of your credit cards at 30% or below. In addition, make sure you read the fine print on the rates and minimum payments. Recently, my minimum payment tripled!
- Have any Assets? Real Estate, 401k, stocks/bonds, etc.
- Have any Debts? Credit cards, car payments, loans, etc.
- Savings. The more money you have saved up in your bank the better it looks to the banks.
- Foreclosure/Bankruptcy: If you have foreclosed on a home recently, you must wait at least three years to be considered for a conventional loan. Otherwise you may have to look at other alternatives such as owner fiancing and wrap around loans. **Do you research before agreeing to owner financing or wrap around loans.
The above information are the mere basics of what the lender/broker will ask from you. Really try to see if you can capitalize on owning home right now or in the near future with all the available buyer incentives. Tyr to at least check and see if you can get approved for a mortgage loan. If you don’t, it’s okay. Take action and make the changes you need to qualify. Always keep moving forward and set a plan of action to acheive home ownership.
