If you have any friends, relatives or co-workers who have recently purchased a home, ask for recommendations.
Then, just like with any other major purchase, or life decision, do some research. There may be some financial institutions you feel more comfortable with than others. It may be the bank or credit union where you currently hold checking or savings accounts. Some people feel more comfortable with a large bank, others may feel a smaller institution or credit union can provide more personalized service.
Some financial institutions will offer you incentives if you don’t currently bank with them if you choose to get a mortgage through them.
Invest Atlanta is one resource which will provide you with a list of approved lenders to choose from:
Some lenders will ask for your paperwork immediately; others will want to wait until you get closer to approaching the contract stage. The initial documents you’ll need to provide to get started are:
- One month’s worth of pay check stubs
- To month’s worth of bank statements from all your accounts
- Two month’s worth of statements from retirement accounts
- Two year’s worth of W2 forms
Your lender will also check your credit score from the three national credit bureaus: Equifax, Experian and TransUnion.
Your credit scores can vary by as many as 100 points from one bureau to the next. Your lender will throw out the top and the bottom numbers and use the one in the middle to determine your credit score. According to credit.com, here’s how scores stack up:
- Excellent Credit: 750+
- Good Credit: 700-749
- Fair Credit: 650-699
- Poor Credit: 600-649
- Bad Credit: below 600
Your credit score, along with your debt-to-income ratio and the amount of money you have for a downpayment will help determine whether you qualify for a conventional or an FHA loan. An FHA loan is a mortgage that’s insured by the Federal Housing Administration.
Have questions about FHA loans and lenders? Here’s a resource that can help: