The mortgage landscape has changed over the years, and it will continue to change as the economy and government involvement fluctuates. If you’re a first-time homebuyer or have had credit problems in the past, the prospect of applying for home loans in Idaho can be intimidating. It shouldn’t be, though. Some of those changes we just mentioned, such as increased loan limits and new loan types, make getting mortgage home loans a little easier. If you’re wondering what you need right now to qualify for a home loan in Meridian, here are a few mortgage lending tips you can take to the bank.
A Stash of Cash
Hopefully, you’ve been saving up to buy a house but depending on your income level and where you want to buy it is still possible to buy a home without any money down. Typically home loans in Idaho have certain costs associated with them. Typically there are a number of fees involved with buying a house and, according to MoneyCrashers, most of them don’t even go toward the cost of the house. The costs involved in getting mortgage home loans include fees for:
- credit reports ~$35
- home inspections run ~$300-$500 and appraisals are typically ~$500.
- title insurance. Buyer’s Policy is typically $300-$700 and is dependent on the mortgage amount
- loan application, underwriting and processing fees are typically 1%-2% of the loan amount
- misc. closing costs include HOA transfer fees, misc. prorations, taxes, recording, Fed Ex or other misc. fees incurred by escrow on behalf of the buyer.
- earnest money
Earnest money is the only cost noted above that is applied toward your down payment. The rest are considered preliminary costs (such as inspections) or closing costs (Those associated with your loan or with title or escrow costs). Typically closing costs run around 2-2.5% of the loan amount and the good news is that if you have an Experienced Meridian Idaho Realtor he will know how you can typically get some or all of those costs negotiated and paid by the seller if needed. This helps those buyers who may have enough for a down payment but not enough to cover their closing costs. Typically the net effect of this is that your closing costs are financed into the loan. The catch is that your Realtor has to find you a good enough deal that the despite the closing costs being added to the price, the property must still appraise for the purchase price.
Then there’s the down payment. Your mortgage lender will expect you to have a percentage of the value of the home in the bank for the down payment. Just how much money that is depends on the sales price of the house and the type of loan you’re applying for. In general, you’ll need to put down at least 3-5% percent of the purchase price, but putting down more, if you’re able, is one of those mortgage lending tips that can make it easier to get approved, get a better interest rate and pay less in mortgage insurance. However, if you have One of the Best Meridian Idaho Realtors he can help you find a loan for 0% down in some areas and if you are a Veteran, everywhere!
Here’s how: VA and USDA home loans in Idaho don’t require down payments, but lenders will still typically want to see that you have money in the bank equal to a few mortgage payments. It eases the underwriter’s mind to know that you’ll be able to make the first couple of payments without getting into financial trouble.
Decent—but Not Necessarily Perfect—Credit
After the real estate crisis hit its bottom in 2011, more focus than ever was put on credit scores—especially when it came to getting mortgage home loans in Meridian and nationwide. Though you may have heard that you need a score of 680 or higher, the reality is that lenders will consider scores as low as 600 if you have a fairly good recent history, such as no collections or late payments in the last 12 months. It’s absolutely worth it to find out what your credit looks like before a lender orders a credit report on you. Doing so gives you a chance to get any possible mistakes corrected, and you won’t be blindsided during the process of applying for mortgage home loans. Also, USA Today recommends paying off debts and avoid making large purchases or incurring new debt right before you apply for a mortgage, as well as during the home purchase process.
A Source of Income
You can’t qualify for home loans in Idaho if you don’t have a source of income. Sure, that income can be a trust fund that provides for living expenses including a house payment or it can be retirement, Social Security or disability income. However, most people get their income from a job. Lenders look for a minimum of a 2-year history of increasing or at least unchanging income or if you are moving to a new job that can be waived if you are moving within the same industry or job classification. They also want to know that your job is solid so they’ll ask your employer for verification of your employment. When it comes to your job and income, the best mortgage lending tips are #1) don’t quit or change jobs during the application process and #2) don’t get fired.
Get Your Records in Order
There’s a lot of paperwork involved in getting mortgage home loans in Meridian, Idaho. The lender won’t be able to do much for you unless you come prepared. The Lenders Network has a document checklist borrowers should go over before setting an appointment to meet with a mortgage lender. Some of the items you’ll need include:
- most recent paycheck stubs, along with 2 years-worth of W2s (or tax returns for self-employed borrowers)
- most recent 2 months bank statements or sometimes more
- list of assets and debts
- copy of your credit report, which they will pull after you give them permission
- gift letter, if your down payment was gifted to you
Bankruptcy documents, divorce decrees, and verification of additional or alternative income are other items that some borrowers may need.
To find out more about finding a great lender in Meridian Idaho or Homes for Sale in Meridian, Idaho give Jeff Stewart at Stewart Realty a call for a personal tour of the area and some great homes that fit your style, needs and budget.
We are ready to serve you!
Jeff Stewart, Broker/Owner, Stewart Realty, LLC
Direct: 208-602-1993, Office: 208-887-5445