Minimum Requirements for Residential Financing:
The most important step in financing is your debt to income ratio. A mortgage lender will need to pull your credit to determine your debt to income ratio. Listed below are minimum requirements for residential financing.
1. 600 Credit Score (no late payments within 12 months) Best Score 640 & above
2. 3.5% DownPayment for FHA Financing (excluding HUD Homes & VA Loans)
For example: If sales price = $300,000 Then Down Payment = $10,500
2. 3 months Bank Statements
3. Most recent Pay stub
4. Last 2 years Filed Tax Returns
5. Any B/K must be minimum 1 year from discharge for FHA mortgages.
6. Any prior foreclosure must be 1 year from when the previous bank sold the property, assuming your credit has been re established.
There are a few Downpayment Assistance Programs below. However, they are income sensitive & all have limited annual funding, so be prepared to pay your downpayment in the event the program can’t fund your downpayment. Pre – approval is key in determining your eligibility for any program.
DO provide requested documentation promptly and in its entirety.
DO continue living at your current residence.
DO continue making your mortgage or rent payments.
DO continue to use your credit as normal.
DO keep working at your current employer.
DO keep your same insurance company.
DO stay current on all existing accounts.
DON’T change your employment or marital status.
DON’T make any major purchases (car, furniture, jewelry, etc.).
DON’T change bank accounts.
DON’T make any large cash deposits into your bank accounts.
DON’T transfer any balances from one account to another.
DON’T close any credit card accounts.
DON’T consolidate your debt onto one or two credit cards.
DON’T apply for new credit or open a new credit card.
DON’T max out or overcharge on your credit card accounts.
DON’T take out a new loan or co-sign on a loan.
DON’T pay off any loans or credit cards, charge offs, or collections without discussing it with us first.
DON’T finance any elective medical procedure.
DON’T join a new fitness club.
DON’T open a new cellular phone account.
DON’T start any home improvement projects.
Once you decide to become a customer of Diamond Realty Brokers, we will guide you throughout the Pre Approval process.
The first step to home ownership is getting pre-approved by a lender before you shop for home. This will help determine a target price range that is suitable for you. This needs to be done about 45 days before you anticipate closing on a new home. In Atlanta real estate, homes can go under contract within 30 – 45 days if the property is priced average. If the property is priced very well, you could expect the property to go under contract within days from being listed. Once we have your approval letter from your lender, we then schedule property showings. Please note your pre approval letter from your lender is active for about 45 days, if we don’t contract on a property within 45 days you’ll need to get pre approved again. This is mainly because the lender will need to make sure there hasn’t been any changes to your income, employment & credit profile.
Choose a lender that is right for you. If you can’t find a lender, our lender partners provide FHA, VA & conventional home loan mortgages. FHA now requires a 3.5% downpayment on the purchase of homes other than hud homes. For example, if the purchase price of your home is $200,000 multiply by 3.5% which equals $7000 downpayment.
The downpayment does not include closing cost. The downpayment is the amount required from you by your lender, in an effort for them to fund the balance.
The closing cost are fees charged by the lender to you, in order to package & close your loan. Although the seller often assist in helping buyers pay a percentage of their closing cost, it is not a requirement of the seller. Your lender can give you an estimate of your closing cost prior to closing.
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