Regardless of the type of mortgage you seek or the amount of down payment you can make, here’s how to get the best deal:
Check your credit. Correct any inaccuracies and clear up any problems. For example, if you missed some debt payments in the past because of sickness or family strains, you can attach an explanation to your report. Many lenders will take such extenuating circumstances into account.
As you’ll discover, your credit report focuses on your history of paying off debt. Fortunately, missed payments in the distant past won’t count heavily if you have been diligent in recent years.
Look for a helpful lender. After you’re up to speed on the current mortgage situation, work with a lender to get pre-qualified or pre-approved for a loan. You’ll have to supply your financial data before you have a specific purchase in mind.
Pre-qualify. This means you have a reasonable estimate of how much money you can borrow and how much you can spend on a home.
Get pre-approval. When you’re pre-approved your financial information has been verified so your loan can be ready faster. Some realtors and sellers prefer to work with buyers whose loans are pre-approved.
Pinpoint your purchase. After you have been pre-qualified or pre-approved you’ll have a firm idea of how expensive a house you can afford. If you wish to make a smaller down payment, look into government-backed loans from FHA or VA. Moreover, these federal loans don’t require a “credit score,” which may help if you’ve had problems in the past.
