Home Buying in McKinney>Question Details

Kristi Harris, Home Buyer in Texas

How do I go about getting pre-approved for a home?

Asked by Kristi Harris, Texas Tue Sep 23, 2008

If I'm not credit worthy or my credit is not acceptable, what is the next step that I take in trying to purchase a home? Please send specific details as what is my first step to make.

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Kristi-

Do me a favor and ignore your credit score for a second. One thing that you need to realize regarding your credit is that what is done is done. Your only option for past credit delinquencies and collections is to either pay them off or leave them alone. While your score can be a determining factor on a conventional loan, it is less of a facotr for an FHA loan. If your credit is bad because of past factors such as job loss, medical issues, natural disaster, etc and you can write a letter of explanation and provide some supporting documentation to that fact. Along with that you can show not only recent timely credit that is on your credit report and you can provide alternative credit such as 12 months worth of timely payments for such items as Auto Insurance, Utilities, Cell Phone Bills, Rent Checks, etc. I even had someone use their last 12 months of payments for their child's braces.

If you can support your credit worthiness and your ability to repay, then a lender is more likely to approve your loan vs. other applicants. It's all in the way you present it.

Yes, you want derogatory items removed from your credit report so your scores will improve, but you don't have to be under the impression that that HAS to happen before you can own a home.

Please call me if you have any questions.
Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com
2 votes Thank Flag Link Tue Sep 23, 2008
Kristi,
Your first step is to contact a mortgage broker. They can get you pre-qualified over the phone within a matter of minutes. If your credit isn't where you need it to be, many of them will recommend steps you can take to improve your score.

Your second step is to contact a Realtor. There is no cost to you as a buyer for representation, and having a professional on your side will help you throughout the entire home buying process. Tell your Realtor what you want/need in a home and what you are pre-qualified for. Our job is to find homes that meet your needs and let you visit the homes. Once you find the perfect home for you and your family, we help you with all the necessary paperwork to purchase the home. We work directly with your lender and we guide you through the process from start to finish.

If you have any other questions/concerns, please let me know. There area a couple of great mortgage professionals that work in the McKinney area that I can recommend to you which will be very helpful to you. Please feel free to call me at 214-418-0180 and I will be happy to provide their phone numbers.

Have a wonderful day!
Melissa Hailey
Coldwell Banker Jane Henry Realtors
North Texas Top Team Realtors
214-418-0180
1 vote Thank Flag Link Tue Sep 23, 2008
Kristi,

Are you certain, you are not "credit worthy?"

We find that many people have a poor personal opinion of their own credit....our recommendation is to contact several lending agencies to get their input.

If your credit is as you say it is....you might want to look for an opportunity to lease with the option to buy. Under the present market conditions, we are seeing more and more of this type of arrangement. To find out what is available in the "lease option" market, we suggest being in contact with your local Trulia real estate professional.

We hope things work out for you....

Good luck,

The "Eckler Team"
1 vote Thank Flag Link Tue Sep 23, 2008
If you are not credit worthy you need to work on increasing your credit scores via credit repair OR reducing you debt ratio paying your bills on a timely manner. You need to save towards down payment, inspection, appraisal, earnest money. Contact my office if I can be of further assistance I am a loan officer and realtor.
972-699-9111
http://www.lynn911.com http://www.homes-for-sale-dallas.com
Web Reference: http://www.lynn911.com
1 vote Thank Flag Link Tue Sep 23, 2008
Start working on your credit. Attend a credit workshop put on by a lender or public counseling agency. Collin County might have one...I know Dallas county does. Then start working on improving your credit. That means paying bills on time, paying off credit cards every month, paying the other debts you owe. I do not suggest using a credit repair company as most of this work you can do yourself. You also want to start a savings plan to put aside money every month so you will have cash to use for a down payment, closing costs, and other purchase costs.
Web Reference: http://www.teamlynn.com
1 vote Thank Flag Link Tue Sep 23, 2008
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
Kristi,
If your not credit worthy then the first step I would take is work on my credit to get it up there. NOthing else at this point.

Good Luck.
0 votes Thank Flag Link Sun Sep 28, 2008
I have several mortgage folks with whom I like to work. Since I deal with a lot of first time buyers and folks with questionable credit, these loan officers also work well with my buyers.

These days customer service is even more important than ever. Prospecting for new clients is a necessity, and it makes sense for realtors and loan officers to work with buyers with credit issues over the long run.

Consumer Credit Counseling Service http://(www.cccs.net) is one place you can be sure you won't be ripped off in repairing any blimps on your credit. Most loan officers will have other folks they have confidence in that they may suggest you talk with.

First step is to talk with a lender and see where you stand now. Second step is to find out what you need to do to improve your creditworthiness.

To get specifics to fit your situation, you are going to need to speak in-depth about your situation to someone.
Web Reference: http://www.cccs.net
0 votes Thank Flag Link Wed Sep 24, 2008
Hi Kristi!!
You would be surprised at what can get approved for good rates.... but if you are indeed below the credit standards, I offer a free one-on-one credit consultation.
This consultation includes going over your credit report and loan application to address deficiencies that are keeping you from buying today.
Typical consultation clients are loan ready in 6 months or so. I only have one rule. You have to read my free ebook before I will help you. I don't have time to work with someone who can't complete this little task(You would be surprised at how many people will not complete this step. They want me to do everything for them).

http://www.dallasloanguy.com/docs/about_credit.pdf
0 votes Thank Flag Link Tue Sep 23, 2008
Kristi,

First, don't feel that you are an isolated case. Many people are in your shoes. If you don't know a good mortgage broker that you can trust, I will be happy to assist you pick one that will listen to you and help you.

Naima
214-289-8555
naima@sumner-realty.com
Web Reference: http://www.sumnerrealty.com
0 votes Thank Flag Link Tue Sep 23, 2008
Lynne911 made some excellent points. In addition to the 3.5% down, there are additional upfront expenses.

Earnest deposit expectations vary from region. The lowest I have ever heard of was $500, but that was unusual. I would expect at least $1,000, but it could be very different in Texas.

Home inspections tend to run from $300 to $700 dollars, depending on what needs to be inspected and local costs.

So, if you are looking at a $150k home, your upfront costs are going to be at least $5250 for down payment, plus at least $500 for earnest money, and at least $300 for home inspection for a total of:

$6,050.

Just something else to consider.
0 votes Thank Flag Link Tue Sep 23, 2008
First, if you don't have one already, you may want to get a free credit report. I've pasted the link to a government website that will tell you how to get your report.

Second, go to the Ginnie Mae website and use the affordability calculator there to see if you can afford a home you would want to live in. You may actually be better off renting.

Take a close look at your debt to income ratio. This is one of the most important aspects for getting a loan. Do you have any major bills that will be paid off soon? In two years, five years? If you are in a position to pay off a significant bill (like a car payment,) this will help in getting a loan.

If you have used the Ginnie Mae calculator, you have an idea of how large of loan you could afford. Figure out 3.5% of that loan amount. This is the money you will need to come up with for an FHA loan.

This information is just a baseline to have before going in to speak with a lender. You could try speaking to the loan officer at your bank.
0 votes Thank Flag Link Tue Sep 23, 2008
I would ask a family member or friend for a good lender in your area. They can tell you what you can qualify for and if you need your credit fixed they can point you in the right direction. Hope this helps.
Have a good week.
Jeff
0 votes Thank Flag Link Tue Sep 23, 2008
Call a trusted Lender to run your credit. After speaking with you and getting answers to questions about your job and past credit issues, then they can tell you what you can afford, how much the monthly payment will be and how much you will need to put down. The pre-approval is a good tool when making an offer to show you are a qualified buyer for the property you are interested in.
0 votes Thank Flag Link Tue Sep 23, 2008
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