Wedding season is here. First comes love then comes marriage then comes home-hunting. It sounds simple but for many couples transitions from renting to owning is the first decision they face post-nuptials. Once you’ve found your perfect match and say “I-Do” you start thinking of the perfect home and you might need the perfect loan to help you make these dreams come true. If you or someone you know is getting married or recently so, here are some tips that can help the couple prepare for the mortgage process.
Check your credit.
There are several ways to get a free credit report but it’s important to make sure there are no mistakes. That’s the primary reason to annually review your credit because mistakes can happen and when they do your credit scores can be damaged and you won’t even know about it until you apply for a mortgage. If you do find a mistake, document the error and let your loan officer help get the mistake fixed for you. Mortgage companies have business relationships with credit agencies and when the error is properly documented the mistake can be fixed within a matter of hours when it might take you 30 days or more if you deal directly with the credit bureaus.
Make a Match with a Lender
Speak with a loan officer over the phone to get an idea how much you can qualify for. Sure, there are lots of online resources that “prequalify” you based upon a few simple questions but those resources are limited to the questions they ask and the answers you provide. There can be times when a couple decides they can’t afford a home due to an online questionnaire when all they did was choose the wrong loan term. If someone selects a 15 year fixed instead of a 30 year, the monthly payments on the shorter term can cause debt to income ratios to be too high. A loan officer can help you choose from a variety of loan programs designed around you, not the entire online world. As you begin your savings plan, stay in close contact with your loan officer who will hold your hand all along the way.
Determine Your Downpayment Options
Finally, get an idea on how much money you’ll need in order to buy and finance a home. You’ll need a down payment plus you’ll need funds for closing costs. Your loan officer can provide you with a cost estimate that will show you what fees you might expect at the closing table and will also ask that you supply your most recent bank statements when you apply for a mortgage showing you have sufficient funds to close.
Most mortgage programs will allow for some portion of your down payment to come in the form of “gift money,” which is exactly what it sounds like: money someone gives you to help you buy a home. Most may think of gift money as large gifts allowable exclusively in the context of a familial relationship, but some programs allow any general well-wisher to contribute any amount to your cause, whether or not they are a relative. The FHA Bridal Registry program allows couples to open a down payment registry account with their lender and to deposit checks into that account from anyone who wants to contribute to helping a couple become homeowners.
Funds may be deposited by friends and relatives directly into the Bridal Registry Account, or given by cash or check to the couples or individuals for deposit. This account will take the guesswork out of gift selection. These gifts can be given with the assurance that the donors are providing the couples or individuals with an opportunity to purchase their first home.