The first step is filling out an application. This is normally done through an online application, however if you need help you can also fill out the application over the phone.

Your Real Estate Agent will really appreciate it if you are already pre-qualified before you start requesting to view homes. If you don’t already have someone to work with, I am happy to refer you to a Real Estate Agent who can help you with your home shopping.

It really depends on your situation. There are programs out there for people with lower credit scores or even no credit score, however those programs generally require more of a down payment or have a higher interest rate. If you have at least a 580 you may qualify for an FHA or USDA loan and a 620+ will make you eligible for a Conventional loan. 620+ is required if you are looking for Down Payment Assistance for a government loan (FHA, VA, USDA) and 640+ is required for Down Payment Assistance with a Conventional loan.

If your credit is not in the place where it needs to be to qualify for the program that you would like to use, we can come up with a plan to get you where you need to be. Sometimes this just requires paying down a few items on your credit, where other times it may require formal credit repair. Depending on how much needs to be done, this repair process can take between 30 days to a year or more. Every situation is a little different. I’m happy to help you come up with a plan that is unique to your situation and needs.

The answer depends on a variety of factors. Once you have filled out an online application and we determine your estimated purchase price we will know more about what loan options are available to you. Some people may qualify for multiple programs, where others may have just one that suits their needs the most. The different loan types all have different down payment requirements. See common loan types.

There are four different costs you should be aware of when starting the mortgage process.

1. Earnest Money Deposit – This amount is typically 1% of the purchase price. This amount is negotiable and may be higher or lower. Your Real Estate Agent should be able to advise you how this may affect your offer.

2. Option Fee – This amount is optional and negotiable. Can be $200+ depending on how long you would like to have for your option period. Your Real Estate Agent should be able to advise you how this may affect your offer.

3. Home Inspection – This is optional, but very much recommended ($400+). This is the inspection that will tell you if there are any defects in the home that you may not be aware of after just touring the home. The inspector will go on the roof, and in the attic, and find out if there are any issues that you would want to be aware of as the buyer and potential owner of a home.

4. Appraisal – This is the only Lender Required up front cost. This normally runs around $550, however there are many factors that affect an appraisal’s cost including size and location of the property. You will receive an invoice from the appraisal company and they will work to schedule the appraisal as soon as it is paid.

For a $200,000 home, you should expect at least $3,150 in up front costs that will need to be paid out of pocket.

There are several factors that play a role in how much home you qualify for. The short answer is that you will need to fill out a loan application for your loan originator to determine how much home you can afford. The main thing that a loan originator is looking at to calculate this amount is your Debt to Income ratio (DTI). This is the ratio of your gross monthly income in comparison to your monthly debts as reported on your credit report. These will be items like credit cards, loans (including student loans and auto loans), and other mortgages. Collections and charge offs will also appear on your credit report and count differently toward your DTI depending on loan type. The total DTI also includes the proposed monthly payment of the mortgage you are applying for. The DTI is sometimes referred to as the Back End Ratio where your housing payment is considered your Front End Ratio. Each loan type has different guidelines regarding how high your DTI can be to qualify. The amount of home that you can afford is not necessarily a firm number, as there are many factors that play a role and there are often estimates being used throughout the qualification process. If your DTI ratios are tight, it may be worth looking into a scenario using the subject property that you would like to buy. If your DTI ratios are fairly low compared to the average home cost in your area, you may end up qualifying for more home than you wish to pay for.

Although there are benefits to putting 20% down, this is not a requirement to get a mortgage. Minimum required down payments can be as low as 0% or as high as 5% depending on which loan type you go with. The benefit to having 20% to put down would be if you go with a conventional loan, because having at least 20% down will allow you to avoid the requirement for mortgage insurance. Investment properties may have different down payment requirements than when you are buying a primary residence.

Conventional - Between 3-5% as your minimum down payment

FHA – 3.5% minimum down

VA – 0% down

USDA – 0% down

This is a common misunderstanding, but there are always going to be some amount of closing costs associated with the loan. This means that even with a 0% down payment, not only will there be some up front costs there will also be prepaid items and other loan related costs that will be due at closing. That's not to say there aren't ways to help get some of these costs covered, but every scenario is a little different.