Frequently Asked Questions About Mortgages

While a higher credit score gives you a better chance to qualify for a home, plenty of programs work with not-so-perfect credit. Some might require a higher down payment and have reserve requirements, but usually, there is a program that will fit anyone’s financial situation.

Your credit score, or FICO score, is affected by many different factors. The most significant things that negatively affect your score are late payments, collections, foreclosures, bankruptcy, and having high credit balances regarding your credit limit. The best way to keep your score up is to ensure your credit card use is lower than 30 percent of each credit limit, make timely payments, and not let any account go into collections. Unfortunately, I have seen collections for a little 50 dollars, and the amount isn’t a factor; a collection is a collection, and it’s a shame to take such a hit to your score for just 50 dollars.

Well, this couldn’t be further from the truth. While having a larger down payment has its advantages, there are plenty of programs that let you put down as little as 3.5 percent, 3 percent, or, in the case of a USDA or VA loan, those programs allow you to put no money down to qualify. Just keep in mind there are always closing costs with any loan program, so you will need to have a little money saved up for closing costs, but there are always ways the lender or seller can help.

Stable employment is a big concern while qualifying for a loan. Any lender will want to make sure you are gainfully employment and it's stable so you will be able to earn money to repay the loan. A good rule is two years, but if you just graduated college or a trade school, there are exceptions to the two-year requirement. Also, you can change jobs during the 2-year requirement if it's in the same trade profession, and the new employment will be stable.

While renting has advantages for some people, paying rent to someone else benefits the landlord, not you. By owning your home, you have a property that is 100 percent yours. Also, you get many tax advantages from owning your own home and an asset that will appreciate over time, and you will build equity to help your financial future, not that of your landlord. With renting, you are usually not required to do maintenance and help upkeep a home like you would with being a homeowner. Still, the benefits of being a homeowner will always outweigh the benefits of renting.