There are so many people that think that they cannot get a mortgage to purchase a new home. They want to, but lack the proper guidance to overcome what they think their obstacles are. Below are some of the most common excuses and how to overcome them.
“I do not have enough money saved for a down payment” – There is a rumor floating around that with the tightening of the credit standards in mortgage lending, that borrowers need 10% or more of the sale price in order to obtain a mortgage. This is just a myth! There are still 0% down financing programs available, and the most common mortgage right now, FHA, only needs 3.5% of the sales price for a down payment. Even if you personally do not have that amount of money saved, the down payment can come in the form of a gift from a family member, a loan on your retirement program, borrowing on unsecured debt, or just having a garage sale. There are even down payment assistance programs available depending on where you will be purchasing! Where there is a will, there is a way.
“My credit stinks” – Many people think that because their local bank or credit union will not give them a loan, it is just not possible for them. Not so! Local banks and credit unions lend their own money, what we in the biz call portfolio money. The lend out the money customers deposit such as savings accounts and CD’s. Therefore, they are much more conservative when it comes to lending that money out. However, when you deal with a lender that will obtain their money from another source, there is more leniency. For instance, FHA normally lends to a 600 credit score and even has new guidelines down to a 500 credit score! Even if your credit is tarnished, with the proper guidance, it will not take long to get it straightened out to be financeable.
“I don’t make enough money to qualify” – This can be an issue for people who are self-employed or have only been on their job for a few months. Even though the guidelines for underwriting no longer allow for stated income loans, where you do not have to prove your income, there are still exceptions to the guidelines. For instance, most lenders want a two year history of employment. If you have been on the job for a year, but worked in the same field or were in school studying for your career prior to that job, we can obtain an exception to the two year rule. For those that just simply do not show enough income, certain programs allow for a co-signer to be on the mortgage with you. This allows you to use the income of the co-signer in addition to your income, even though that person will not be living in the home. Lastly, look into qualifying with an adjustable rate mortgage. With FHA, you can refinance these loans after you purchase the home with little to no documentation. I am not saying that you should get in over your head, but if you can afford the payments, we can find a way to get you approved. Most likely, your housing payment will be less than what you pay in rent!
The bottom line to all of these excuses is just that, they are excuses. With the right guidance and the desire to accomplish your goal, you can get a mortgage! Whether you can do it right now, or in the near future, it is obtainable for anyone! So stop listening to the media, stop making excuses, and start your journey to owning the American Dream! You can take that first step by contacting me!