Financing In Today's Real Estate Market

I'm often asked the question "do I qualify"?  My answer is most often ... It depends and then I go through a series of questions and call my trusted loan officer to get the answer.  What catches my attention about the question is that it is typically asked more as a statement and a disbelief because the person doesn't think it's possible that they do qualify, or they  have no idea what it takes to qualify to own there own home.

Here are a few questions to ask yourself in preparation for a pre-qualification conversation with a Loan Officer.

1.  Are you employed?  Typically you must have a job (there are some circumstances that will qualify a person for a home loan without employment).  How long have you been at your job?  If you changed Jobs recently are you doing the same or similar type of work that you were doing?
2.  What is your annual income before taxes- The lenders will use this number  to calculate what is known as your debt to income ration.
3.  Add up all of your monthly "minimum payments" for your debts.  This will be important in calculating the debt ratio's used to determine qualification.
4.  Do you pay or receive  any additional income such as child support? (have this number ready).
5.  Do you have a "side business", that you either claim income from or show losses on your tax returns?
6.  Know your credit score. Lenders will use your middle score as the number to qualify you so look at all three credit bureau scores and determine which is your high, middle and Low.
7.  Are there any derogatory comments on your report that do not belong to you?,that if removed would help raise your score.  Sometimes if you dispute an item it actually lowers your score instead of raising it.  Discuss this with your loan officer before you contact the credit bureau.
8.  Have you had any foreclosure, short sale, BK's or 30 day late payments? (just because you have had these doesn't mean you don't qualify, just be prepared to tell the loan officer when they were i.e. 7/2011 or 7 years ago etc...The more detail you can provide the better.
9.  How much money do you have for a down payment?  You can consider sources such as bank accounts, 401K, IRA, TSP, other retirement and investment sources.  If you don't have any money for a down payment do you have a person who will gift you the down payment?
10.  How much of a  monthly payment will you be comfortable with?
11.  If your a veteran  tell your loan officer as there are many state programs as well as the federal VA loan programs available to you.

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