Establishing a positive credit history is very important
3 Creditors, paid on time for 12 months to establish a credit history to purchase a new home
- Pay rent with a verifiable source – check from your personal checking account
- A small credit card
- Only charge what you can afford to pay off at the end of the month
- Only charge a maximum of 50% of the credit limit (Credit limit = $500, Maximum charge = $250)
3. One more type of credit is required. This could be another small credit card, a car loan, student loan, or other type of financing. It is not a recommendation to obtain a loan just to qualify for a mortgage loan.
Verifiable Down Payment
All banks/lenders must verify the source of your down payment
What to avoid: Large Deposits within the last 60 days
Borrowing money for the down payment is not allowed
Gift Funds-The down payment may be a gift from a relative
1. If the application is signed, and then gift funds deposited, the gift funds have to be verified by a gift letter and a bank statement from the gift donor.
2. If the application is signed, and the gift funds have already been deposited within the last 60 days, the gift funds have to be verified by a gift letter only.
3. If the application is signed, and the gift funds do not show up on the last 2 months bank statements (60 days), there is no verification required.
Down Payment Assistance Programs
l Down payment assistance programs may be available. Keep in mind not all programs are acceptable to all banks/lenders. It is a good idea to discuss this with the Mortgage Advisor at the time of the application.
l If possible, it is best to have your own source of funds for your down payment. This adds to a favorable review of the mortgage loan.
Applying for the Mortgage Loan
Once you have a favorable credit history established, a 2 year history of employment, and the down payment, it is time to apply for your Mortgage Pre-Approval! Please contact Melinda Movick, Mortgage Advisor, for a 10 minute phone consultation to see if you qualify to buy a new home!
*This is based on the current underwriting guidelines; these guidelines are subject to change at anytime without notice. The information provided is for guidance purposes only. All underwriting guidelines are subject to change.
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NMLS ID: 253071
MO ID : 340-MLO