So you want to buy a home?

Ok let me just say I had the hardest time setting this blog up!! But I did it, and I will provide some links that helped me in case you would like to set up your own. Ok now on to the post!

This is a blog about bettering your life. That is something that I constantly strive to do and this blog is going to focus on ways to do that. As I have worked in the mortgage industry for the past two years, I have gained valuable knowledge in the steps needed to obtain a home.

This blog is going to start with information on how to reach the cornerstone of the American dream - homeownership. I am not going to sugar coat this process, it takes a lot of hardwork and goal setting. Especially now that mortgage guidelines are tougher than ever. Being prepared and knowing what to expect is half the battle. So let's begin!

Now I know the ideal way to start the home buying process is to go out househunting and find the home that you fall in love with right? Wrong! Before you even think about doing that you need to get preapproved. Now I know you are thinking what is the difference between a prequalification and a preapproval? A prequalification is when the loan officer takes your income and asset information verbally and pulls your credit. A preapproval is when they collect your income and asset documentation (W2's, paystubs, bank statements, etc.), pull your credit and have an underwriter review the information. Please note that different lenders do have different ways of doing things, and some people will use these terms interchangeably.

Before we go any further, I would strongly recommend getting your credit scores from all three credit bureaus. The minimum credit score needed to qualify for an FHA loan (Federal Housing Administration, we will go into more detail on these loans later) is 620 and with a conventional loan it goes up from there. When you receive your scores, you will receive three. The lender will use the mid score as your qualifying score. If you are going to have another person on the loan, the lender will take the lower of the middle two scores. If you are below the 620 mid score qualifying mark, that is going to stop you at this point in the process (for now).

A good website to learn more about how credit scores are calculated is www.myfico.com. Variables such such as payment history, amount owed compared to credit limit, how long accounts have been open, and the mix of accounts you have are taken into consideration.

Credit score is just one variable that will be needed for a preapproval, but if you do not have that base covered, there is no need to worry about the other variables that are taken into consideration for a preapproval just yet. Now for those of you that do have at least the minimal qualifying score, we will discuss what else will be taken into consideration on the next post!

**Please note that the advice provided is based on current market guidelines. Guidelines are subject to change at any time and do. For advice on your exact situation, please contact your local loan officer/mortgage broker that you are working with. The opinions/statements provided in this blog are in no way opinions/statements of my employer**