Where Do I Start When Buying A Home?

In order to qualify to buy a home, you must clear 3 hurdles: the credit, the income, and the assets.

For Credit, it is very easy.  Most banks and lenders have the same credit criteria and it is black and white.  You have to be above the specific credit score, with no judgments and no collections.  Simple as that.  Most banks don't want to lend money to people who have other federal debt that they've fallen behind on.  Makes sense, right?

For Income, mortgage companies have to make sure you can afford the home you are interested in.  We have to make sure both your mortgage payment (including taxes, insurance, etc.) and your monthly debts (credit cards, car loans, etc.) don't go above a certain percentage of your Monthly Gross Income (income before taxes).  If you are trying to calculate it yourself, use 36% as your percentage to be safe.

For Assets, mortgage companies need to prove that you will have enough money for the down payment and the closing costs.  So we'll want to see your bank statements, retirement accounts, or knowledge about if a family member is going to help you reach that goal.  CHFA has a program that will provide the down payment and closing costs for you or we can negotiate sometimes to have the sellers pay part of your closing costs.  But don't always bank on that.  A general rule of thumb is the more money you can show, the better.

This is why most people and Realtors want you to go to a mortgage company first.

Does this spark any questions?  Does this help to make sense of it all?  I'd love to hear your thoughts.

Keith Turner
860-444-0650
keitht@mccuemortgage.com