When looking to secure a mortgage, staying on top of your credit is key. Well in advance of applying for a home loan, be sure to check your credit score. Every 12 months, you can access one free credit report from each of the three credit reporting companies. Examine your credit report for inconsistencies, such as errors regarding late payments, or possible identity theft. If you will be co-signing with a spouse, s/he should do the same.

Once you are committed to buy a home, wait to make any future purchases until AFTER you close on your home. Hold off on the big-screen TV, furniture, and gas barbecue grill until after the closing. Why? Any large purchases will affect your debt-to-income ratio, thus affecting your ability to close on the house.

Sounds obvious, but keep on top of your bills and payments. Any late payments will be a red flag to the bank and may delay or stop your process.

Keep savings in mind. Typically, you need to have on hand enough funds for a downpayment (3.5% with FHA program, or 20% with conventional loan), plus closing fees (around 3-5% of purchase price).



While the home financing market has changed, you can still buy a home with a down payment of as low as 3.5% of the purchase price. Despite popular belief, you don’t need perfect credit to be a homeowner: Credit scores of as low as 580 can obtain financing. There are also programs that waive lender fees, also helping would-be homeowners save money, as well as special plans for veterans – for no money down.