ve. This typically ranges anywhere from 2 – 6 months of the monthly PITI (Principle Interest Tax and Insurance payment) and should be over and above the amount of money you will need for your down payment and closing costs. They will require these assets to be verifiable in some sort of liquid account and “seasoned” for at least two months. (Meaning you can’t have mom and dad deposit five thousand dollars into your account for two days while the bank verifies the money). Most lenders will require the most recent two monOkay, the time has finally come for you to consider purchasing a home. You’re sick and tired of every Joe Schmoe telling you what a waste your rent money is every month. So now what? Do you contact a Realtor, or a mortgage broker? What’s your price range? How much money do you need to have in your bank account? Hopefully, by the time you’re done reading this article, you’ll have enough confidence to make that call!

I would recommend asking for a mortgage broker referral. If you have a trusted friend or family member that has a good relationship with a mortgage broker that would be great, also the Realtor you choose will probably have one to refer you too as well. (It’s probably a good idea to talk to both – two minds are better than one right?)

Things you should know up front:

• The first thought on your mind is probably your credit score (FICO score). What kind of score do you need? What score do you have? Ideally, a lender would like to see a FICO score of 680 or higher. There are vast loan options available to borrowers with FICOS from 620-680, but they will typically require more documentation, and higher interest rates. If your FICO is higher than 740 you will have many loan options to choose from. With a 680 FICO or higher you should be able to obtain a fair rate and possibly a low documentation loan. If you have a bankruptcy, tax lien, or collection account reported on your credit your options may be more limited.

• TYPICALLY – A first time homebuyer will be required to prove at least 12 month’s positive rental history. Most lenders require either copies of cancelled checks, or a verification form which demonstrates timely rent payments. Most lenders will not accept this form from a private party.

• While 100% financing exists for 1st time home buyers, there are typically better loan options available to somebody who puts five or even ten percent down. Interest rates on the second mortgage tend to significantly decrease when the borrower has put ten percent down.

• Most lenders will also require you to have a cash reserve. This typically ranges anywhere from 2 – 6 months of the monthly PITI (Principle Interest Tax and Insurance payment) and should be over and above the amount of money you will need for your down payment and closing costs. They will require these assets to be verifiable in some sort of liquid account and “seasoned” for at least two months. (Meaning you can’t have mom and dad deposit five thousand dollars into your account for two days while the bank verifies the money). Most lenders will require the most recent two mon

ember that has a good relationship with a mortgage broker that would be great, also the Realtor you choose will probably have one to refer you too as well. (It’s probably a good idea to talk to both – two minds are better than one right?)

Things you should know up front:

• The first thought on your mind is probably your credit score (FICO score). What kind of score do you need? What score do you have? Ideally, a lender would like to see a FICO score of 680 or higher. There are vast loan options available to borrowers with FICOS from 620-680, but they will typically require more documentation, and higher interest rates. If your FICO is higher than 740 you will have many loan options to choose from. With a 680 FICO or higher you should be able to obtain a fair rate and possibly a low documentation loan. If you have a bankruptcy, tax lien, or collection account reported on your credit your options may be more limited.

• TYPICALLY – A first time homebuyer will be required to prove at least 12 month’s positive rental history. Most lenders require either copies of cancelled checks, or a verification form which demonstrates timely rent payments. Most lenders will not accept this form from a private party.

• While 100% financing exists for 1st time home buyers, there are typically better loan options available to somebody who puts five or even ten percent down. Interest rates on the second mortgage tend to significantly decrease when the borrower has put ten percent down.

• Most lenders will also require you to have a cash reserve. This typically ranges anywhere from 2 – 6 months of the monthly PITI (Principle Interest Tax and Insurance payment) and should be over and above the amount of money you will need for your down payment and closing costs. They will require these assets to be verifiable in some sort of liquid account and “seasoned” for at least two months. (Meaning you can’t have mom and dad deposit five thousand dollars into your account for two days while the bank verifies the money). Most lenders will require the most recent two mon

borrowers with FICOS from 620-680, but they will typically require more documentation, and higher interest rates. If your FICO is higher than 740 you will have many loan options to choose from. With a 680 FICO or higher you should be able to obtain a fair rate and possibly a low documentation loan. If you have a bankruptcy, tax lien, or collection account reported on your credit your options may be more limited.

• TYPICALLY – A first time homebuyer will be required to prove at least 12 month’s positive rental history. Most lenders require either copies of cancelled checks, or a verification form which demonstrates timely rent payments. Most lenders will not accept this form from a private party.

• While 100% financing exists for 1st time home buyers, there are typically better loan options available to somebody who puts five or even ten percent down. Interest rates on the second mortgage tend to significantly decrease when the borrower has put ten percent down.

• Most lenders will also require you to have a cash reserve. This typically ranges anywhere from 2 – 6 months of the monthly PITI (Principle Interest Tax and Insurance payment) and should be over and above the amount of money you will need for your down payment and closing costs. They will require these assets to be verifiable in some sort of liquid account and “seasoned” for at least two months. (Meaning you can’t have mom and dad deposit five thousand dollars into your account for two days while the bank verifies the money). Most lenders will require the most recent two mon

ory. Most lenders require either copies of cancelled checks, or a verification form which demonstrates timely rent payments. Most lenders will not accept this form from a private party.

• While 100% financing exists for 1st time home buyers, there are typically better loan options available to somebody who puts five or even ten percent down. Interest rates on the second mortgage tend to significantly decrease when the borrower has put ten percent down.

• Most lenders will also require you to have a cash reserve. This typically ranges anywhere from 2 – 6 months of the monthly PITI (Principle Interest Tax and Insurance payment) and should be over and above the amount of money you will need for your down payment and closing costs. They will require these assets to be verifiable in some sort of liquid account and “seasoned” for at least two months. (Meaning you can’t have mom and dad deposit five thousand dollars into your account for two days while the bank verifies the money). Most lenders will require the most recent two mon

ve. This typically ranges anywhere from 2 – 6 months of the monthly PITI (Principle Interest Tax and Insurance payment) and should be over and above the amount of money you will need for your down payment and closing costs. They will require these assets to be verifiable in some sort of liquid account and “seasoned” for at least two months. (Meaning you can’t have mom and dad deposit five thousand dollars into your account for two days while the bank verifies the money). Most lenders will require the most recent two month’s full bank statements to evidence the cash on hand. Many borrowers use 401k accounts to verify these funds.

• The lender is going to require documentation to evidence your income and assets. A “Full Doc” loan typically requires:

• Previous 2 Years Tax Returns
• Previous 2 Years W-2’s or 1099’s
• Previous 30 days pay stubs showing year to date totals
• Previous two months bank statements (all pages)

• If you have high credit scores (usually over 700) you m ay have the option of doing a stated income/stated asset loan. These loans help to minimize the amount of documentation required and are especially advantageous for self-employed borrowers.

You should ask your Loan Officer to thoroughly explain any loan options that are available and you should request a Good Faith Estimate. The Good Faith Estimate will allow you to see the expected costs of obtaining the loan. Also, it will give you an estimate of the cash required for the transaction and expected monthly payment.

Although it all seems very confusing at first, if you choose a good Loan Officer they should be able to walk you through the process while giving you sound mortgage advice to make the process very simple. If at any time you feel unsure of what you’re being advised to do, consult with someone you trust, your Realtor, or another Loan Officer for their advice. Don’t let a Loan Officer “schmooze” you into a loan you are not comfortable with. Stay strong, and be cautious!