1. Determine Your Readiness

Step one is to gather three extremely important pieces of information to determine if you are ready to buy a home.

  1. Credit Score

  2. Savings Account Balance
  3. Debt/Income Ratio

If you singed up to get the PDF checklist emailed to you, then you have the tools you need to gather this information. If you haven't, then you can sign up below.

Credit Report

We recommend using IdentityGuard.com to get your credit score. It is the most accurate score from a third party that matches our internal credit report inquiry.

Savings Account Balance

This is how much money you have set aside to use as a down payment on a home.

Debt/Income Ratio

The math is easy, so don't get stressed. All you need to do is find out what your installment and revolving debt is. These are things like your car loan, credit card payments, and even student loans. Want to learn more about installment and revolving debt? We recommend reading this article to get a better understanding.

 

2. Know Your Loan Options

Remember the three things you gathered in step one? Now is the time to take that information and put it to good use. Each loan option has basic criteria that you can put your own data against. This will give you an idea of what loan options are actually options for you to purchase a home with.

Conventional Loan

Requirements:
3% Down Payment
620 Credit Score

A conventional loan is unlike a FHA or VA loan in the fact that it is not formally backed by a government agency. It, instead, follows guidelines provided by Freddie May and Freddie Mac. These are two agencies that help standardize mortgage lending in the US.

This is a great option for home buyers who have a decent credit score and money for a down payment. Don't worry, though - the traditional myth that you need a 20% down payment is false. You can get in for as little as 3% down. With Guild Mortgage, you can even take advantage of our Guild 1% loan.

FHA Loan

Requirements:
3.5% Down Payment
580 Credit Score

The FHA loan is a government backed loan. FHA, standing for Federal Housing Administration, was established by the National Housing Act of 1934. This Act sets the standards for underwriting and insures loans made by banks and private lenders for home financing.

This loan option is ideal for home-buyers with a 580+ credit score, and money for a 3.5% down payment. Gifted funds are also able to be used as part or all of the down-payment.

VA Loan

Requirements:
0% Down Payment
600 Credit Score
Certificate of Eligibility

The Veteran Affairs loan is set aside for service-members who have served in our countries military. We want to take a moment to say thank you, if this benefit is applicable to you. We are forever grateful for your service, and are so happy you can take advantage of this amazing program.

With the VA Loan, you have the benefit of not needing Mortgage Insurance (PMI), and do not even need a down payment! WOW! You also have the benefit of very competitive interest rates for the term of your loan.

 

3. Get Your Pre-Approval

Getting your pre-approval is paramount to putting an offer on a home - so before you shop for a home, or even a real estate agent, get your pre-approval out of the way! One of the worst feelings is finding a home that you are absolutely in love with - but you can't get an offer accepted because you are missing a pre-approval! Let us help.

Documents You'll Need To Prepare

  • Paystubs for the past 30 days
  • W-2s and 1099s for the past two years
  • Federal Income Tax Returns for the past two years
  • Government issued photo ID
  • Bank Statements from the past 60 days

If Applicable

  • If VA: provide DD-214 if discharged or reserve/guard, or 'Statement of Service' if active duty
  • If retired: award letter or retiree statement for any Social Security, retirement or pension income
  • If paying or receiving child support: copy of court order and proof of payments
  • If bankruptcy in last 7 years: provide complete property address of foreclosure/short sale
  • If on an IRS repayment plan: copy of plan
*these items will not inhibit you from starting the loan process.
 

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