by Samuel Gordon

Created on: February 02, 2008   Last Updated: February 03, 2008

This is a great time to buy a home but a very bad time for speculative real estate investments. The challenge is getting financed. For those with perfect credit, consistent job history and low debt to income ratio it may not be such a hard task. For those of us that don't fall into that perfect world we will need a little help.

First:

You will need down payment and closing cost. Usually you're looking at twenty to thirty percent of total sales value. For example if you want to buy a home that cost hundred thousand ($100,000) then you will need to come up with twenty thousand ($20,000) for down payment or thirty thousand ($30,000). You will need to figure in another 10% percent for closing cost. This down payment example is your worst case scenario sometimes you may pay 5% percent or 10% percent down but be prepared for 20% to 30% percent down payment especially if your credit is not so great.

Second:

You will need to have a mortgage broker or your banker run a credit check. It's a good principal to make sure you don't open any additional lines of credit for the duration of the home buying process. Based on your credit and income you will pre-qualify for what ever available program your bank may have. Bye the way based on what shows up on your credit the loan process could come to a stop right here. If that does happen try to fix the problem and then try again. I don't recommend you run your own credit simply because most bankers and brokers credit systems are far different than what you will find on the Internet.

Third:

Make sure all your documents are organized. Depending on your bank and the programs that you qualify for you will need certain financial documents. Here is some of the basic information you will usually need.

1. Copy of driver license and social security card
2. Two most recent pay stubs
3. Last two years of tax returns
4. Bank may also require last 2 to 3 months of bank statements
5. You will need to consider what Insurance company will carry your home owner policy.
6. If you receive social security benefits are any type of pension you will need the initial reward letter.

Fourth:

Your broker will receive a pre-conditional approval after paperwork has been submitted to the banks underwriting department. The bank will require these conditions to be met before the loan can close. Your broker or bank processing department will handle these stipulations. If they need any further information to meet these requirements then you will be contacted.

The process does

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