Several factors play into getting a mortgage. If you’re prepped upfront and plan accordingly, you should be well on your way to enjoying a dream home.
But what’s the secret sauce in the prep and the planning? I’m glad you asked 💁♀️.
Tips on how to get a mortgage include:
- Working on your credit score
- Saving for closing costs toward your mortgage
- Having your financial and personal documentation ready
- Being flexible with your home expectations
- Getting a mortgage pre-approval
Follow along for the debrief on making these tips work to get a mortgage and you a better home loan candidate.
Work on that credit score 👀
The big question: What credit score do you need to buy a house? You could qualify for an FHA loan with as little as a 500-580 score, according to U.S. News. For other loan types, like Conventional or USDA, you may be able to qualify with a 620-640. Start on credit repair if you’re not quite meeting the mark for these score ranges. Tools, like the Credit Karma app, can assist in steps to improve your score based on your specific credit history.
Start saving for costs
Many are familiar with a down payment, but don’t realize other closing costs are involved when purchasing a home. Fees can include mortgage insurance, homeowner’s insurance, appraisal fees, property taxes and then some. Before you have a panic attack at the thought of shucking out more money, breathe. Several of these costs can be as little as 1% of the sales price, and some can be even less than $100.
It’s still chunks of money, but be aware of an estimate and start saving ahead of time to put you in a good spot. A friendly loan officer can assist you with a more concrete idea of how much you’ll spend in fees. There may even be options for down payment assistance programs that give you money to go toward closing costs, so ask about those.
Get 👏your 👏papers 👏ready
One of the first questions you’ll get (after your credit score): Do you have your documents handy? This request includes personal and financial docs. Personal items include your license or government-official ID, a Social Security card or, if applicable, proof of citizenship. For your financial documents, you’ll likely need a recent W-2 and pay stubs, tax returns and bank statements.
If you have any large deposits that aren’t from your normal paycheck, you’ll also need a letter of explanation detailing where it came from. If you have awesome, generous family members planning to give money toward your purchase, you’ll need a letter for that, as well. Your local loan officer can offer you a template for these letters if needed.
Everyone wants the mansion with 14 bedrooms and a movie theater, right? But do you have that kind of budget? It’s great to have an idea of your dream home, but you may need to be flexible on some items. Finding a house with an extra room for a man cave or craft room may be what breaks your budget, but also just unavailable in the market. Don’t lose all these dreams just yet though; for additional rooms you’re craving, you could plan a renovation in the near future. Even better? After a few years of owning your home, you could tap into the equity you’ve built to do a renovation refinance to fund the addition 💁♀️.
Get a mortgage pre-approval
Know what you can afford. Often, people are intimidated to start a convo with a loan officer because it seems so official. There’s a sense that you’re committing to something and have to get all your ducks in a row. A loan officer is available to talk to you and help you know how much home you can afford, with no commitment needed upfront. With all your previous steps taken care of, you can know how much house you’d be pre-approved for (and for how long) fast.
Why are you waiting? Time to get cranking on these items sure to put you on your way to get a mortgage. These may sound a little stressful at first, but know that it’s a process. And one you don’t have to go through alone. Our Movement loan officers are here and ready to walk you through the homeownership journey.