One of the reasons that first time home buyers aren’t diving into the real estate market is the difficulty in obtaining mortgages.
This is a national issue but stems from, in my opinion, a few core issues:
- Total debt – student loans, credit card and car loans
- Job market – many college graduates are under-employed
- Self-Employment – I am self employed and understand the extra hoops
Mortgage lenders in 2014 have new guidelines including strict debt to income ratios. Although most mortgage lenders will tell you not to worry about common .. the Consumer Financial Protection Bureau is eager to enforce the new regulations.
I am not a lender, but everyone who offers mortgages will have a “NMLS #” ~ it should be easy to see on their marketing material.
Where to Start
Reviewing a “Tri Merge Credit Report” is essential. Your credit score or FICO score is very important and if you can pay down something like a Best Buy Card or high balance credit card then great.
Do Not Cancel a card without consulting a professional.
Do Not Open ANY New Accounts.
Let me just say, if you have a 675 score today, start paying everything early and more than the minimum to get over 700.
Veterans Administration or VA Loans
If you have a Certificate of Eligibility or DD 214 then keep reading… all other should skip ahead.
If you are an active service member or a Veteran who wants to take advantage of this unique program then the having COE or DD 214 is step number one.
The Washington D.C. region has a very high upper limit for VA loans in 2014… $843,750
If you receive Disability Pay, please mention this to your lender as this allows for the VA Funding Fee Waiver.
Federal Housing Authority Loans (FHA)
These loans allow for a low 3.5% down payment and you should discuss it as an option if you don’t have a large down payment.
