Path to Your Perfect Home: Start Planning Today!

Start your exciting homeownership journey by boosting your credit, managing your debt-to-income ratio, building your job history, and growing your savings. We're here to help every step of the way. 

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Homeownership Requirements 

1) Credit

Your credit can affect your mortgage eligibility and interest rates. The minimum credit score required is 620 from Equifax, Experian, and TransUnion credit bureaus. It is recommended to have two active trade lines with large payments up to two years. Any debt in collections or repossessions must be paid off. If you do not have a considerable credit history, lenders may use large payments towards non-credit reporting loans, rent, insurance, or utilities.

2) Income 

Stable and sufficient income is essential for securing your dream home. Lenders will ask to assess your income to guarantee you can afford mortgage payments. Plan to have a steady income stream well before you start the home buying process. Lenders asses the debt-to-income (DTI) and payment-to-income (PTI) ratios to analyze your total monthly debt over your gross monthly income and your total monthly mortgage payment over your gross monthly income. They prefer for your DTI to be 38% or less and your PTI to be 28% or less.

3) Employment

Lenders prefer borrowers with a consistent job history. Aim to have at least two years of steady employment in the same field to increase your chances of mortgage approval.

4) Savings

Saving for a down payment and other home buying costs is vital. Start saving early to accumulate a significant down payment, which can lower your mortgage and improve your loan terms. Additionally, having a financial cushion for unexpected expenses is important. Make sure you resolve any credit issues prior to focusing on savings goals. This allows more time for you to build your credit history and score while you save!


Application Process

Applications tend to stay active up to 60 to 90 days. Here are some things to consider when applying for a mortgage: 

• Choosing a Lender

When choosing the right lender, borrowers should consider interest rates, local lenders, and history with a financial institution.

• Prequalification or Preapproval

Borrowers must contact their chosen lenders for prequalification or preapproval. This process can take up to two days to two weeks dependent on delays. Prequalification or preapproval shows the homeowner that the borrower is dedicated to purchase the home.

• Types of Mortgages

There are many options for mortgages. Reach out to your financial institution to learn more about their mortgage services. You should consider the loan term, your ideal payment amount, how long you plan to be in the home, the location of the home, your credit score, and your debt-to-income ratio.

• Providing Adequate Documentation

Purchasing a home requires proper documentation to verify your identity, credit, income, employment, and savings. Make sure you compile all of your documentation at once to avoid delays in the home buying process.


More Things to Consider

• Real Estate Agents 

Using a real estate agent can be helpful in identifying your needs and wants. They also guide the borrower through the process of buying a home.

• Choosing a Home 

When you are looking for your dream home, consider how much you saved, how much the monthly payment is, what areas are affordable for your budget, the home value, and if the home fits into your desired lifestyle.

• Making the Offer 

Once you found your dream home, making the offer can be time-sensitive. Hiring a real estate agent can help you decide a fair offer. The offer should contain contingencies. However, sellers might not accept offers with a lot of contingencies. Make sure you are positive in your choice!

• Inspections and Appraisals 

Unless your lender requires an inspection or appraisal, these are optional. Ask your lender about their inspection and appraisals.

• Homeowners Insurance 

Lenders require all borrowers to have insurance at closing.

• Closing Steps 

The lender will contact the buyer to release the final closing amount. The buyer will do a final walk through and schedule a closing appointment to secure the title. After signing the required paperwork, the keys are yours!


Home Sweet Home is Just a Click Away. Apply for a Northland Mortgage Today!

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Or Call 989.739.1401 to Speak With a Mortgage Originator.


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Sign up for the online Homebuying 101 Course today and take the first step toward owning your dream home. 

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