Preparing To Qualify For Mortgage Explained One of the most common inquiries I get is when potential home buyers ask on advice in preparing to qualify for mortgage.
Preparing to qualify for mortgage takes time and patience
Everyone who has documented income can qualify for a mortgage
Having bad credit should not deter borrowers in preparing to qualify for mortgage
Millions of hard-working folks were impacted by the Great Recession of 2008
They lost their businesses, they lost their jobs, they lost their pensions
They lost all of the equity they had in their homes
Many filed for bankruptcy
Millions of homeowners had to go through a foreclosure and/or short sale
The whole mortgage industry went through major changes
New laws and regulations were launched and implemented
Entire mortgage sectors were eliminated
All sub-prime lenders went out of business
The sub-prime market went extinct overnight
Mortgage loan originators had to go through new pre-licensing requirements
Both federal and state testing and intensive federal and state criminal background checks and credit checks were created and launched
This was done in order for them to be able to originate mortgage loans to the public
Days of no doc loans and stated income loans were long gone
Now, borrowers need documented income in order to qualify for a mortgage loan
It may take some time in preparing to qualify for mortgage for individuals who are self-employed or those who have poor credit
Self-employed individuals need to have positive and qualifying income in order to qualify for a mortgage loan
Borrowers with poor credit need at least 12 months on-time payments on all of their monthly debt obligations
Just meeting the minimum credit score to qualify for FHA Loan is not sufficient
Just because borrowers meet the minimum credit scores does not guarantee they will get qualified for a mortgage loan
Lenders will look at overall payment history on credit report
It is okay not to pay off older collection accounts and charge off accounts
It is okay to have prior bad credit, collections, charge offs, judgments, bankruptcy, and foreclosure
However, lenders want to see re-established credit and no late payments for the past 12 months
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