Mortgage Ready Checklist
Step by step, this "get mortgage ready" checklist will help you understand what it takes to be mortgage ready and buy a home. Knowledge is the key to success in buying your first home, and the mortgage ready checklist is a great place to start.
Qualifying: Mortgage Ready Checklist
Steady and Stable Income
Your income should show your ability to repay the loan to be mortgage ready. You will need 2 years of a steady work history in your industry to qualify for a home loan. There are a few exceptions to the two year rule, speak with a mortgage consultant for more information.
A FICO credit score of 580* or higher is required to qualify for an FHA loan. Conventional loan programs require a 620* credit score or higher.
*Edit: The financial impact of the Covid-19 pandemic has resulted in Federal mortgage guidelines raising the minimum credit score to a 640 FICO. The length of time for this raised credit score requirement is undetermined.
To qualify for a mortgage, you must be able to show that you have the assets to pay the down payment and closing costs. The minimum down payment due at closing, is based on a percentage of the purchase price of the home and mortgage program you choose.
Get Organized: Mortgage Ready Checklist
In order to prevent money laundering through real estate transactions, U.S. lending regulations prevent large amounts of cash or undocumented assets from being used for the down payment of closing costs.
The funds or assets used to make the down payment must have a well documented source. “Seasoned Funds” are usually saved in a checking or savings account. Any items sold or withdraws from retirement funds for the down payment must be well documented.
You will need to submit supporting documentation with your mortgage application. Being prepared, will likely save you a bit of time.
Gather these documents:
- the past 2 years or tax returns and W-2’s
- two months of bank account statements
- verification of employment
- paycheck stubs for the past 30 days
- copies of retirement account statements
- copies of driver’s license or official state ID for all applicants
- *Other documentation may be required
Speak with a Mortgage Consultant
Speaking with a licensed mortgage consultant is the best way to understand the flexibility of your home buying budget and mortgage options. If you aren’t mortgage ready quite yet, a mortgage consultant can help you understand the next steps you should take to get there.
Shop for a Home: Mortgage Ready Checklist
Get Pre Approved
Before you shop, get pre approved for a mortgage loan. Being pre approved means that you are truly mortgage ready.
Pre approval is free with Aspire Lending and has several advantages for home buyers. Pre approved buyers are more likely to have their offer accepted by the seller. Being pre approved makes the mortgage process easier once you have a purchase contract, and can help you close faster.
Reach out to us with your mortgage questions. We are happy to help you get ready for a mortgage by helping you gather information you need to be mortgage ready. Helping you reach your goal of becoming a homeowner is what we do.
Use this FREE print out to help you get mortgage ready: