5 Tips for Getting Mortgage Ready.

Start with getting your FICO credit report and scores (there is a difference)

The first thing a lender will do when you apply for a mortgage loan is to check your credit, you should also. I recommend my clients purchase all three scores via www.myFICO.com . It will reveal your three mortgage scores.

These scores can vary from what you get from other credit score providers. It is really important that you know your MORTGAGE credit score. myFICO.com can provide you with the three credit scores numbers that most lenders will review. You want to make sure that your credit report is accurate. With a middle score of at least 620 you can usually get started house shopping.

"CLEAN UP" Your Credit

If your credit score is not quite where it needs to be. Correct inaccuracies, pay off debts you can afford to pay off, pay your bills EARLY (not just on time). Call your creditors and negotiate (or plead) that they remove negatives from your records. Also, don't apply for new credit, the less inquiries you have on your credit the better it is for your score.

FYI... FICO scores range from 300 to 850. Each credit bureau calculates the FICO score based on the information within that bureau only. This means that the three bureaus may have different scores for an applicant.

The FICO score is broken down according to the following categories:

Payment history
35%
Amounts owed
30%
Length of credit history
15%
New credit
10%
Types of credit in use
10%

Save Money $$$$$$

You will need some money saved up in order to purchase a home. I know it sounds simple but its not just for your down payment, which can be anywhere from 3-20% of the purchase price of your dream home. You will need money for inspection reports, closing cost, furnishings, home repairs, lawn care, moving fees etc. Some (not all) mortgage products may even require you to have extra money in reserves to cover your mortgage payments for after closing.

Save as much money as possible, it will make the process a lot easier. Consult a mortgage professional to let you know how much you will need saved up to get the ball rolling to purchase your new home.

Keep it real about what you can afford

There is a great home that is within your budget. Decide on how much you can spend. Calculate all you monthly expenses and then add the cost of your new home. The mortgage premium should include your taxes, interest, insurance and Principle. At this point have an honest conversation with yourself. Can you afford this monthly amount for 30 years, do you have enough savings to cover this amount for at least six months if something unexpected happens. Figure out what your Debt to Income ration will be, the mortgage company will have limits to what they let you borrow depending on your debts and how much money you make. So keep it real on how much buying power you really have.

Take your time, to get it right.

Buying a house may not be a realistic option for you right now for various reasons. Its ok, take your time and set a plan in place. If it's your credit, you can hire a credit advisor to get you ship, shape and ready to go. If it is savings, start saving, cut back on frivolous expenses. Set a goal in place and little by little start putting yourself in a place where you can get approved for a mortgage. If you fell in love with a particular home or neighborhood do not despair, I tell my clients 95% of the time I can find another DREAM home for you when the time is right.

Now if you are ready to get more tips and pointers on how to get ready to find your DREAM home give our team a call at 832-610-4565. If you would like us to send you a list of our preferred Mortgage Partners please complete the attached form.