When you’re ready to buy, we’ll help bring you home.
Buying a home for the first time is an exciting prospect, but it can seem like a long road from shopping for a home to getting the keys. Before you get going, make the first step getting pre-approved for a mortgage. It will make the rest of the process run more smoothly.
A pre-approval estimates how much money you can get from Freedom Mortgage to buy a house. It gives you an idea of how much you can afford to spend, which helps you focus on homes that fit your budget. And it can make your offer more attractive to the seller because it gives them confidence you will qualify for a mortgage to buy the home. Here’s what you need to do to get pre-approved.
We want to determine whether you have the ability to repay your mortgage. So we'll check your employment history and salary, looking for job stability and a steady source of income. We'll ask for pay stubs and two years of tax returns for income verification.
Besides your earnings, we will need to know how much money you owe and if you pay your bills on time. These bills can include credit card debt, car or college loans, and medical bills. We will calculate a debt-to-income ratio (DTI) to ensure your total debt payments do not exceed a certain percentage of your gross monthly income.
Besides looking at earnings and debt, we will pull your credit report to see your credit score and credit history. These will show if you've made payments on time and if you have credit issues in the past, such as a bankruptcy. It's a good idea to check your credit report before you start the home buying process to ensure it is accurate.
You can contact the three major credit reporting agencies - Experian, Equifax and TransUnion - to request copies of your report. You can also get a free annual credit report by visiting www.annualcreditreport.com. That report will enable you to check for inaccuracies, but it will not contain a credit score.
Finally, you need some money in the bank (what the industry refers to as 'reserves'). Granted, first-time home buyers don't always have a large nest egg, but loans like those insured by the FHA or USDA can help you buy a house without a large down payment.
Still, you'll probably need some cash for a down payment, closing costs, moving costs, buying furniture, and more. We are also likely to ask for bank statements and documents that show stocks, bonds, IRAs, and other assets to get a complete financial picture.
Would you like to speak to one of our Loan Advisors about getting pre-approved for a mortgage to buy your first home? Please call 877-220-5533 or visit our Get Started page.
