Here is what the lenders look for in a qualified Home Buyer: (This is very important!)

SSI income, at least $1500 per month in income for a duplex, and $2000 per month for a single family, 1-2 years of wager earner employment on the Job with the same income requirement, in the same field, or 2 years of self-employment in the same field.  There is clearly more documentation that you will need in all situations as the process moves along.  These just are the very basic things that you need to begin the pre-approval process.  You must have a middle fico score of no lower than a 540.  Some lenders will accept lower.  However, guidelines have changed so much everyday, that it is very difficult to keep up with the many current daily updates.  You need to have no major delinquent debts within the past 12 months totaling more than $5000.  Wage earners must have two recent pay stubs, and the last 1-2 years of W-2's.  Obviously, there are some upfront costs for buyers such as an appraisal report, home-owners insurance, earnest money, and a home inspection.  All together, you should not have to spend more than $1500 for these things.  Lenders like to see what is called 2 months of PITI, better known as 2 months of principal, interest, taxes, and insurance.  They want to see that you have 2 months of reserves set aside in your bank account in case of an emergency, job loss or any housing repair that may be needed.  Having a borrower with no reserves looks pretty risky to a lender! If you are trying to buy investment properties, the lender now wants the buyers to have at least 6-12 months of reserves saved in the bank.  Any time the lender wants you to have reserves or a downpayment in the bank saved, they want to make sure that it has been "seasoned" for 60 days.  This ensures that the buyer knows how to save money, and that someone didn't just dump the money into your account "yesterday." This is again tricky...because, some lenders don't mind.  So, again, it depends on what the guidelines are for that specific lender.  Depending on your credit score, and tradeline history, you may or may not need a down payment!  If you will, and you don't have it, there are some down payment assistance programs that we have available to assist you, as well as investors who are willing to help with those costs.  Most of the purchase transactions that we do, we usually have the buyers closing costs financed into the loan and purchase price of the home.  That way the buyers don't have to come to the closing with so much money.  Some buyers do need to bring a down payment.  Ultimately, those will be the less risky buyers that the lender will favor.  Some of these same rules also apply to many individuals who want to refinance their existing properties.

Some of the lenders guidelines are different.  For example: I work with one lender who says that you need to only be employed for one day.  One lender says one year.  Another lender says 2 years of employment, which is the norm.  Another example is that some lenders may say that you need to have your Bankruptcy discharged at least 2 years, some say 3, some say 1 day discharged! Some lenders say that we can buy you out of your Chapter 13 Bankruptcy if you are already a home-owner.  Some lenders will let you buy a house while you are in a Chapter 13!

Also, there are minimum tradeline requirements that many First Time Home Buyers need to have accomplished before buying a home.  The lenders like to see 3 tradelines that have been reported to the credit bureaus.  One tradeline must have been reported for at least 24 months, and have a high limit of at least $3000.  The other two trades that are reporting, or have reported should have high limits of at least $1000, and have reported for at least 6-12 months.  Again. these requirements change among different lenders.  So, if you see that right now that you do not meet these requirements, it doesn't mean that you can't qualify to buy a home.  There are alot of other factors involved that may or may not be considered in your particular income and credit situation.  So do not rule yourself out just yet! Please call us to get a free consultation before you try to decide for yourself that you don't qualify.  There may other ways that we can assist you with qualifying that you didn't think about.  Also, remember that we work with credit repair specialists that can help you to achieve what you need to in order for you to prepare for this home buying process.  For any other questions you may have, feel free to click the "Contact Us" button on our website, or email us and we will be happy to assist you!