If you bought a home a couple years ago, the process would have been relatively painless; even quite simple. Credit was easy, it was flowing freely, and just about anyone interested in a home loan could find a loan product to suit their needs.

Fast forward to 2009 and things aren’t quite as simple. With the near collapse of many of the nation’s banks and lenders, purchasing a new Coppell home has become a bit more complicated; not impossible, mind you, just more challenging.

What You Need to Know Before Applying for a Home Loan:

• You will need an excellent credit score. The best way to get your FICO score in check is to order a copy of your credit report from all three of the credit reporting agencies and scrutinize every detail. Immediately report any errors to the credit reporting agency and do everything you need to do to correct any credit problems. Many lenders now require a credit score of at least 720, so if your FICO score falls short, consider making the necessary changes to raise your credit score before applying for a mortgage.
• You will need at least a 20 percent down payment. Unlike a few years ago when nontraditional loans were commonplace and down payments were, for the most part, optional, today’s lenders are looking for at least 20 percent down on the purchase price of a home.
• You will need a low debt-to-income ratio. Although the exact numbers vary from lender to lender, most banks will look for a low debt-to-income ratio. This essentially means that a good portion of your income should not go towards paying off debts. Most lenders prefer a debt-to-income ratio of lower than 30 percent, so it is important to calculate your debt-to-income ratio before applying for a home loan.
• You will need a steady work history. Most lenders now require a steady work history; specifically, proof that you have been with the same employer, or employed in the same field, for at least one year. Although, once again, each lender will have different criteria regarding your employment history, it is important to not consider changing jobs or changing fields before applying for a home loan.
• You will need to be able to provide all necessary documentation. A popular loan product a few years ago was the “no doc” loan, which enabled individuals to receive mortgages and home equity loans without producing any documentation regarding income or savings. These “no doc” loans are essentially history and are instead replaced with more traditional loans which require the applicant to provide proof of income, just for starters. Be prepared to provide several months of pay stubs, your last year’s tax return and investment and savings documents.

Although the home loan process may be more difficult than it was in year’s past, an individual with great credit and a healthy down payment can snag incredible mortgage interest rates and competitive home prices in today’s real estate market.

The process of house hunting should be positive and exciting, yet for so many it turns out to be quite the opposite. Often times, chaos and exhaustion develop during the house hunting process, thus making it anything but enjoyable.

There are ways to make your house hunting experience enjoyable, it just takes a bit of planning and organization!

1. Make sure you and your spouse are in agreement regarding your next University Park home. The time to hash out your disagreements is before you begin touring homes. It certainly wouldn’t prove to be very constructive to find out your spouse has polar opposite views of what he or she wants in a home while viewing your first property.
2. Be certain that you are on the same page with your real estate agent so that you don’t waste time looking for houses that do not suit you. This is why a qualified real estate agent is crucial. Before you see any University Park homes, talk at length with your real estate agent so that he or she is clear on what you are looking for in a home. Make a list of must-haves, and make a list of things you would like in a home, but that aren’t necessary. Making a list and communicating clearly with your real estate agent will enable the agent to better help you locate the home that’s right for you, and it will also eliminate viewing homes that just don’t meet your standards or needs.
3. Study up on different neighborhoods to get a good idea of where you would like to start your home search. A great location means very different things for different people. For example, you may be interested in the local schools, or the proximity to your workplace, while others may be interested in the area’s local transportation or the distance from local shopping centers and public services. Luckily, the Internet is a great source for information regarding different cities and neighborhoods.
4. Get preapproved for a home loan before you begin searching for homes. Getting preapproved will not only let sellers know that you are serious about purchasing a home, which can certainly be used to your advantage during the negotiation process, but it will also set the parameters regarding how much house you can afford. It certainly doesn’t make much sense to find the home of your dreams, only to find out that it is out of your price range.
5. Limit your home search to just a handful of University Park properties on any given day. Touring dozens of properties in a single day accomplishes little more than tired feet and a spinning head. Instead, limit the number of homes you tour so that you can reflect on each home and remember the homes’ details.
6. Remember to relax and have fun! In the end, even with all of the chaos that often goes along with purchasing a home, the process usually proves to be incredibly gratifying and exciting, so remember to take a deep breath and enjoy the ride!