How To Buy A House (Even If You Have a Less-Than-Perfect Credit Score)

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Buying A Home

After making the decision to purchase a home, you will need to get pre approved for a loan, unless you are purchasing a home in cash. It is best to do this before starting to look at houses. This will allow you to know what price range you can begin searching. It will also save you from falling in love with something you cannot afford. When you submit an offer on a home, a pre approval is included with the offer, this will show seller’s you are qualified to purchase their home.

First step is to fill out a loan application. If you do not know of a lender, contact a real estate agent, they can always point you in the right direction, as they work closely with lender’s on every transaction.

On this application, it will ask for basic information, along with your social security number, past 2 years of work history and financial information. All of this information is used to obtain a credit report. Typically, a credit report will be ordered from all 3 credit bureaus. In addition, payment history and any major credit issues will be checked.

Items you may be required to provide:

**Recent paystubs and  W-2s for the most recent 2 years. If you receive commissions and/or overtime, lenders may require a 2 year history/explanation of this.

**Tax returns, if you are self-employed or own rental property, you may be required to provide tax returns for the most recent 2 years.

**Bank statements: Lenders normally ask for 1 – 2 months of bank statements. This provides documentation of where a down payment and closing costs will be coming from. A “gift” letter may be required, if any of the down payment or closing costs is being given by a family member or company.

**Additional information: Teachers may be required to provide a copy of their teaching contract, explaining their pay schedule. Large deposits and/or name changes may need to be explained.

You will receive a Loan Estimate within 3 business days of submitting your loan application. This will detail the costs and terms for the loan in which applied.

After receiving your pre approval, it is always a good idea to shop around for a loan with the best terms.

Now the fun begins! Time to start looking for a home.