First step in securing a home can be qualifying for a loan


In addition to trying to find a home, there are steps potential homeowners can take to make sure they have the best home loan to help them afford their house.

Ben Petkewich of the Mortgage Outlet walks people through the steps of applying for a home loan.

“Sometimes it takes as little as five business days,” he said. “That depends on how prepared you are.”

If people don’t have the proper documentation or paperwork, it could take significantly longer to apply and receive word back from applying for a loan.

The first thing Petkewich, or any agency representative, might look at is the credit score.

“Credit is so important,” Petkewich said.

He said a score of 620 is probably the bare minimum for people looking for loans.

“If it’s above 640, you’re that much better,” he added.

Petkewich said that score is pertaining to the lenders he deals with primarily. Some lenders allow lower scores depending on the circumstance and some ask for higher.

Typically speaking, Petkewich said to establish good credit, people should try to have a minimum or three credit lines, with less than 30 percent of it being used.

“Try to secure a credit card with a $500 balance,” he said. “Try to get two or three if you can afford to. Use it to buy gas and pay it off monthly. Don’t get into a situation where you’re paying off interest.”

If an applicant doesn’t have an established credit line, Petkewich will try to work with him.

“We had a girl who had a thin trade line,” he said. “We looked at her saving history. She was contributing $200 to $500 each month into her savings account. She hadn’t withdrawn from it. We went back 24 months.”

The lender used that as a basis to help her qualify for a loan.

Petkewich has used utility bills, rent payments and cellphone payments to help people who have thin credit lines.

“It’s on an individual basis,” he said. “I’ve even looked at gym memberships.”

He has also worked with people with bad credit.

“Someone who might have a medical collection, depending on the size, it might be easier to deal with,” he said. “If there are 10 items on your report with one small collection, that’s better than if there are two items on your report and one is in collection.”

Other collections, such as lapsed cellphone or utility bills, can be more damaging. In some cases, Petkewich might advise borrowers to pay bills off right away or urge them to call the company to which they are indebted to set up a payment.

“Sometimes, paying it off right away might decrease your credit score,” he said.

The bottom line is, people need to know their credit score.

“Apply to get your free monthly report,” he said.

He said people can do that by visiting freecreditreport.com.

After looking at credit, Petkewich will look at income.

“We need to determine how you’ll pay this back,” he said.

He will look at whether people are working at an hourly position or salary, if they went to school and are currently in the field they studied and how long they have been employed.

The next thing to look at is a down payment.

“But if you’re working an hourly position, that might not be possible,” he said.

Petkewich said he could refer people to various resources that can assist with down payment options.

“Most people don’t know those programs are available,” he said.

For more information, visit themortgageoutlet.com.

Contact Henderson/Anthem View reporter Michael Lyle at mlyle@viewnews.com or 702-387-5201.

Mortgage basics

Fixed-rate mortgage

A fixed-rate mortgage features a fixed rate for the duration of the loan.

Adjustable-rate mortgage

An adjustable-rate mortgage features a rate that goes up or down based on market conditions. Some of these mortgages have a lower fixed rate for one, three, five or seven years before the price begins to fluctuate.

Government-backed mortgages

Federal Housing Administration (FHA) and Veteran Affairs (VA) loans are both federally backed and feature lower down payment requirements and lower credit score requirements than conventional loans. FHA loans require buyers to purchase mortgage repayment insurance and interest rates are typically higher. Many sellers will hold out for a buyer who can qualify for a conventional mortgage when given a choice.

Conventional mortgage

A conventional mortgage is issued through a private financial institution. It typically requires a higher credit score and a 5, 10 or even 20 percent down payment.

Closing costs

Costs a buyer must pay to secure a loan may include application fees; title examination, abstract of title, title insurance and property survey fees; fees for preparing deeds, mortgages and settlement documents; attorneys’ fees; recording fees; and notary, appraisal and credit report fees. Occasionally some sellers agree to help pay closing costs.

More mortgage education

For more basics on pursing homeownership, visit hud.gov/nevada.
 

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