Today I’m here with Jake Bernhard (nmls: 870775) from United Heritage Credit Union (nmls: 630601) to provide some answers to the most common lending questions we receive.

Today, I’ve asked Jake Bernhard from United Heritage Credit Union to help me answer a few common but very important questions about mortgage lending:

Do you need a great credit score to buy a home?

In short, no. There are great home loan programs specifically designed to help people with low credit scores qualify for a house. If you don’t have an 800 FICO score, it doesn’t mean you can’t buy a home. His company has programs that can help people with scores as low as 600!

What kind of down payment do I need to buy a home?

Jake has programs that require as little as 3% down on a home purchase. Requiring a 20% down payment is a thing of the past. You’ll always want to factor in closing costs, so depending on how the purchase is structured, for a $250,000 home, you may want to have around $10,000 saved up. There are also VA loans that provide 100% financing to veterans, though the VA is strict about which closing costs a veteran can pay; typically, a veteran will pay only these closing costs in order to purchase a home. That means with no down payment and a contract with seller-paid closing costs, a veteran can come to the closing table with no money to buy a home whatsoever.

“If you don’t have an 800 FICO score, it doesn’t mean you can’t buy a home.”

What are the key documents to have when speaking with a lender?

To be qualified for a home loan, you don’t need to have your documentation right in front of you, but it does help.  When the lender asks for your documents typically, you’ll need two recent pay stubs, two years of W-2s, as well as any documents that help break down your base income and your bonus (overtime) income. The more information you have on that initial application will help the loan officer find the best product for you and let you know if you qualify for it.

If you speak with a lender without documentation but you have a general idea of your income, you can still be pre-qualified, and the rest can be verified later. They will double-check this information, however, and they have to go by what’s documented on your tax returns, so keep that in mind when filling those out.

How a bank or lender perceives risk might be a little different from what you might think, so it’s important to get started by speaking with a professional to guide you.

Please know that if you’re intimidated by these questions or answers or you feel like they’re too much for you to process, you can simply reach out to us. We’ll be happy to make this process simple and fun for you. With lending partners like Jake, we can’t help but have you win when you choose to buy a home with us. We look forward to hearing from you!

Check out the UHCU purchase website here: https://www.uhcu.org/loans/home-loans/home-purchase#/what_type_of_property_are_you_purchasing