The journey
Three stages, in order
Get your numbers ready
Know your budget, your credit story and where your down payment is coming from.
Shop with confidence
A pre-approval from a licensed lender tells sellers you are serious.
Close and celebrate
Keep your finances frozen from contract to keys, then celebrate.
Down payment help
You may need less than you think
Grant programs
Some programs offer grants that do not need to be repaid, toward your down payment and closing costs.
FHA loans
Guidelines allow as little as 3.5% down with more flexible qualification.
Conventional 3% down
Some conventional programs allow as little as 3% down for qualified buyers.
State and local programs
Many states, counties and cities offer extra help. Availability changes often.
Program minimums are general guidelines set by loan program investors and change often. Actual qualification depends on credit, income, property, occupancy and more. Assistance programs vary by location and funding and are never guaranteed.
Credit DNA
Your score is a headline
Underwriters read the whole story. Here is what they actually look at.
The red zones
Late mortgage or rent payments and evictions are the most damaging items on a credit file, especially in the last 12 months.
The "invisible" debt
Medical collections are treated differently under modern scoring models, and many lenders discount them.
The human element
Manual underwriting exists for complex files, where reserves and payment history can tell the fuller story.
The bounce back
Waiting periods after bankruptcy or foreclosure are commonly 1 to 7 years depending on the event and loan type.
The student loan factor
How your student loan payment is counted depends on your repayment plan. Income-based payments are often used.
Collections are not the end
Old debts and setbacks do not automatically disqualify you. Real-life situations have real options.
Where did the money come from?
Having the money is not enough
You have to be able to show where every dollar came from.
The 60-day rule
Funds usually need to sit in your account for about 60 days. Large unexplained deposits get questions.
The mattress money trap
Cash kept outside a bank is hard to use. Depositing a lump sum without a paper trail can stall a loan.
Gift funds
Family help is often allowed with a gift letter and a clear paper trail from the giver.
Other assets
Retirement account loans and documented sales of personal property can sometimes help, if timed and documented well.
Debt-to-income
The quiet reason good buyers get told no
Debt-to-income, or DTI, is the share of your gross monthly income that goes to debt. It is one of the most common reasons for a denial, and one of the most fixable.
Front-end ratio
Your total housing payment divided by gross monthly income. Common targets are around 28% to 31%.
Back-end ratio
All monthly debts plus housing, divided by gross monthly income. Common limits run from about 43% to 50% depending on the loan type.
Try your own numbers.
Affordability calculatorProtect your approval
Six ways to kill a loan in 24 hours
Once you are under contract, lenders re-check your credit, job and assets right before closing. Avoid these until you have your keys.
Buying a car or furniture
New payments raise your debt ratio overnight.
Applying for new credit
Every hard inquiry can lower your score and raise questions.
Moving "mystery" cash
Unexplained deposits trigger paperwork and delays.
Changing jobs
Employment is verified again right before closing.
Co-signing anyone's loan
You become 100% responsible for that debt on paper.
Adding new monthly bills
Even small new obligations can tip the numbers.
New rules for buyers
What changed in 2024
Buyer agreements come first
Under the 2024 NAR settlement rules, buyers sign a written agreement with their agent before touring homes. It spells out services and how the agent is paid.
Agent pay is negotiable
You may pay your agent, or the seller may offer to. It is now part of the negotiation, so ask questions up front.
Come home.
There is a seat at the table for you. Join the Village and we will send you the next gathering, the newest classes, and a note from me when something good is happening.