Dated: 01/02/2020

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Are You Tired Of Paying Rent?  This Is The Year To Start Investing In Yourself!  Start Building Equity With Your Mortgage Payments! These Are The Steps To Get Started.  (In Layman’s Terms


4 Steps To Buying A House

Step 1

Find out your credit score (there are 3 major Credit reporting bureaus; Experian, Transunion and Equifax) the credit scores you see from these credits reporting bureaus will show you what’s on your report. These credit scores will give you a good idea on where you stand because the banks use your Fico score to determine your eligibility for a home loan. 

  • Some banks will approve you for a home loan with a fico score as low as 580; just be advised with a credit score below 640 you will be looking at higher interest rates, which equals a higher mortgage. 

  • When checking your credit reports, check for any discrepancies and/or inaccuracies (errors). You can dispute what you think should do not be on there or pay off any past due debts.  That will bring your Credit/Fico score up.  (Usually takes the credit bureaus up to 30 days to review disputes)

  • You can check your credit anytime on Credit Karma, www.experian.com or get a free credit report yearly on https://www.annualcreditreport.com/index.action 

Step 2 

Get Pre-approved for a home loan before you start your house hunting.  The pre-approval will determine how much house you are able to afford.  This will help you and your Real Estate Agent find the perfect home within your budget. 

Contact a Lender and let them know you would like to be pre-approved for a home loan.  There should be no charges for this service (although some lenders charge, most do not) Documentation you will need for a pre-approval are: 

  • Social security number 

  • Proof of employment 

  • Self employment documents (if self employed) 

  • Proof of income

  • Tax documents

  • Bank information 

  • Credit information

  • Place of residence

Step 3 

The fun part… Look For Your Home!!  :)


Step 4

Once you have found a home you will need to go back to your lender and apply for the home loan.  There are several types of loans; Conventional, FHA and VA are the most common. 

  • Conventional Loans this loan is not insured or guaranteed by government agencies; most conventional loans require a minimum credit score of 620, having a higher credit score is better, of course.  Most require a down payment of 20 percent. No mortgage insurance is required on a conventional loan with a down payment of at least 20 percent. (Conventional loans also allow down payments as low as 5 percent, but you will then need mortgage insurance) 

  • FHA Loans– insured by the Federal Housing Administration.  Designed for low-to-moderate income borrowers, FHA loans require lower minimum down payments and credit scores than many conventional loans.  With an FHA loan your credit score can be as low as 580 to qualify with a 3.5% down payment requirement.  You will be required to purchase mortgage insurance with this loan, if your down payment is below 20 percent. 

  • VA Loans – Before you can apply for a VA loan, you must prove you are eligible. Applicants must get a Certificate of Eligibility (COE). Eligible service members, veterans and spouse must meet one of the following criteria: You've served 181 days of service during peacetime. A 620 Fico score is a common credit score requirement for a VA loan.        

             Benefits of a VA loan are:   

            -No down payment requirements

            -No mortgage insurance requirements and low closing cost

            -More credit and income flexibility; making it easier for eligible borrowers to qualify                                                                                                                                                                                         


  • For those with bad credit, larger down payments can make the difference between an approval and a rejection.  The lender believes you are less likely to walk away from a mortgage when you invest more of your own money into the purchase from the beginning. 

  • At least 3 months before you are ready to buy a house make sure you pay all your bills on time, every month; pay down as much as you can on your credit card debt (the lower your credit debt the better it is for your FICO/Credit score); Avoid any large purchases on credit, such as buying a car, furniture, appliances, etc.; Do not change banking institutions; Avoid changing jobs; Do not make any large deposits into your bank account; Don’t let anyone make inquiries into your credit

  • Did you know you could use your IRA or 401k to buy/invest in real estate :) 

Kisha Commodore, REALTOR

Preferred Real Estate Brokers

Mobile: (917) 684-8239

Email: kishanatie@gmail.com


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