Procuring a home loan can be a daunting task. With the countless options of home loans and grants available, how can a home buyer know where to begin? To find out, we talked to Bill Stern, Sales Manager at Access National Mortgage. Here’s his 7 Step Process to the Best Home Loan.
- Contact a lender you trust. Be sure that the bank or financial institution you speak with is very experienced in providing mortgages. Don’t go to the internet! Unfortunately, there are many inexperienced and untrustworthy loan officers and mortgage companies that market themselves on the internet. Stay local or ask for a referral (like our friend Bill – info below).
- Have your credit pulled. Ask your loan officer to pull your credit ASAP. This will be a mortgage pull not a consumer pull. Don’t take free online scores at face value – consumer pulls can be 30-50 points lower than your actual score! Once your loan officer pulls your credit, ask for a copy and have them go over it with you, step by step. You will need a credit score of at least 620 to get most loans. The higher your score, the better your rate.
- Don’t mess with your credit! If you’re planning on buying a home, don’t open or close any lines of credit (credit cards, car loans, etc) as they can negatively impact your credit score. Always make payments on time and try to keep the balances at 50% or less of the available credit. Your lender can show you how to boost scores, get rid of collections, and update late payments.
- Have your documents ready. You’ll want to have these documents ready for your loan officer as they will provide the loan officer enough information to get you approved:
• 2 years of tax returns
• 2 years of W-2s or 1099s
• 30 days of pay-stubs from your employer
• 2 full months of bank statements
• Copies of any 401k, retirement or savings funds
- Ask about special programs. There are home loan programs out there that provide 100% financing, such as USDA, VHDA and grant programs. Once you’ve established what you do and don’t qualify for, look at how much of a down payment you need (if any) and what size loan you can qualify for. FIY: Gifts from family or friends for down payments are allowed!
- Try not to change employment. Always keep your job unless it’s absolutely necessary for you to make a change. If you do make the switch to a new company, communicate any changes with your loan officer.
- Get an approval letter. Ask your loan officer to issue a loan approval letter, not just a pre-qualification. The loan approval means that an underwriter has looked at and approved your financials making your offer stronger to sellers.
That’s all there is to it! Once you’ve completed these 7 steps to the best home loan, just contact a Middleburg Real Estate | Atoka Properties agent to help you track down the perfect property.
Bill Stern is Sales Manager with Residential Mortgage Services in Middleburg, VA. He is knowledgable, easily accessible, and focuses on providing open, honest communication and helpful guidance to assist every client in achieving their financial goals.
*The above is a courtesy contribution from Bill Stern.