Not necessarily, but it will certainly help. It is possible to get a conventional mortgage with a fico credit score as low as 620, and you can obtain a higher cost FHA mortgage with a score in the 500’s. However,be aware that the lower your credit score, the higher the interest rate could be.
The short answer is that you can get a conventional mortgage with as little as 3% down, an FHA loan with 3.5% down, and a VA or USDA loan with no money down at all. However, with a conventional or FHA loan, you'll have to pay private mortgage insurance also knowns as PMI, if your down payment is less than 20% of the home’s sales price. We also offer programs where the lender pays the mortgage insurance in exchange for a higher interest rate. Your loan officer will help you determine which product is right for you.
- Income documents: 30 days paystubs, 2 years W2’s and/or tax returns
- Asset Documents – 2 months bank statements/investment account statements showing funds used for closing.
If you are getting a gift, or taking a 401k loan to buy your home, specific instructions will be provided so you know exactly what documentation the underwriter will need for review.
* Principal: Repayment of your outstanding balance.
* Interest: Payment of the interest charged on the outstanding balance.
* Taxes: One-twelfth of your expected annual property taxes will be included in your mortgage payment, and deposited into your escrow account.
* Insurance: This includes homeowner's insurance, as well as any other hazard insurances you're required to have, such as flood or windstorm. If you put less than 20% down on your loan, this can also include private mortgage insurance.
Based on these four items, your mortgage payments are sometimes referred to as PITI.