First Time Home Buyers Tips And Mortgage Lending Guidelines

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First Time Home Buyers Tips And Mortgage Lending Guidelines

This BLOG On First Time Home Buyers Tips And Mortgage Lending Guidelines Was UPDATED On August 18th 2018

First Time Home Buyers Tips And Mortgage Lending Guidelines:

Once buyers have decided to take the plunge and purchase a home, there are many things to consider and hopefully this article on first time home buyers tips may help answer some of the questions:

  • A home purchase is most people’s single largest investment in their lifetime
  • There are a lot of thought that needs to go when deciding to purchase a home
  • Some first time home buyer tips include such questions and answers:
    • how much home can I afford
    • rural area versus urban area
    • condo versus town home versus single family home
    • distance to work, school districts
    • proximity to major expressways and shopping centers
    • how long are you planning in living in the area you are planning in buying home
  • Talk to family, friends, co-workers, realtors, mortgage loan officers, and real estate industry professionals
  • These folks are folks who have gone through the home buying process and the mistakes they made and what they regret
  • The best first time home buyers tips offered is to listen and talk to prior home buyers and learn by other people’s regrets
  • Many homeowners regret not buying a large enough home
  • Some homeowners regret of buying too much home where it is a strain for them every month when making the mortgage payments
  • Others regret because the distance to work takes up too much of their day, especially driving during rush hour traffic
  • One of the most important first time home buyers tips is choosing the right mortgage lender and getting a solid pre-approval letter
  • The mortgage approval process is one of the most stressful process in one’s lifetime
  • However, with the right lender and the right mortgage loan originator who you can get along with, the mortgage application and approval process will not be bad

First Time Home Buyers Tips And The Importance Of Pre-Approval

I have written dozens of articles about the importance of the pre-approval letter.

  • The pre-approval stage is hands down the most important stage in the mortgage application and approval process
  • Over 75% of our borrowers are folks who did not qualify or got denied after they had a pre-approval letter issued by a loan officer
  • There is no reason why mortgage loan application should get denied or be told borrowers do not qualify after the loan officer issues a pre-approval letter
  • I preach to all of my loan originators who work for me to diligently and carefully qualify the mortgage loan applicant before issuing a pre-approval
  • My philosophy is that with a solid pre-approval, the mortgage loan WILL CLOSE and WILL CLOSE ON TIME
  • Unfortunately many loan officers just issue the pre-approval letter like autographs without properly reviewing the borrowers credit, credit scores, credit payment history, public records, income, liabilities, and assets

First Time Home Buyers: Choosing The Right Lender

Most home buyers will go to their local bank first to apply for a mortgage and get a pre-approval letter.

  • Many times, home buyers get discouraged
  • This is because they get denied by the local bank they visited and were expecting to walk out of the bank with a pre-approval letter but walk out with the news by the banker that they do not qualify for a home loan
  • Unfortunately, banks are notorious in just telling the prospective home buyer that they do not qualify and not telling them that they may not qualify with their bank but they can qualify with a mortgage lender that has no mortgage lender overlays
  • I have countless of home buyers who call me daily who were told that they were told that they do not qualify by the bank and/or lender they just visited
  • Not everyone has perfect credit

Mortgage Guidelines On Employment Gaps

There are times where people go through hard times such as gaps in employment and medical issues where it affects them financially. The end results is bad credit on their credit report. There are two types of mortgage lending guidelines . There is the federal minimum lending guidelines and then there are lender overlays which are additional guidelines imposed by the individual lender. Most banks and lenders will require a minimum credit score of 640 for FHA Loans. However, the minimum credit score requirement that FHA permits is 580 credit score for a 3.5% down payment home purchase FHA Loan. The 640 credit score requirement is the bank’s own overlays on credit scores for FHA Loans. So just because borrowers do not qualify with a bank for a FHA home purchase loan does not mean they do not qualify for a FHA Loan with a mortgage lender with no overlays on debt to income ratios like myself. We do not have any overlays and just go off the federal minimum mortgage lending guidelines. If you have less than perfect credit, collection accounts with outstanding balances, charge offs, or higher debt to income ratios, going to a bank or mortgage company with mortgage lender overlays may not be your lender of choice. Please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response.

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