You may be closer to getting a Florida mortgage than you may think. Here are three easy-to-implement tips that will help you take steps in the direction of your new mortgage that fits your situation just right.

Tip 1: Establish an Acceptable Credit Score or Manufacture a Credit Profile with Credit Lines

Some credit unions offer secured credit cards that can build a credit score. Some banks also offer secured credit cards to enable borrowers to start building credit or to help them reestablish good credit after running into credit problems in the past. To get one, you will have to deposit money into a savings or other account that you pledge as security in return for a secured credit card. After you obtain a secured credit card, charge a small purchase like gas for your car every month and pay it off in full each month to build good credit.

Ensure the financial institution will report your secured credit card payments to all three major consumer credit reporting agencies. Open one to three secured cards within a short period while you don’t have a score. Then, refrain from applying for any more credit accounts until you generate a credit score, and it increases high enough to qualify for a mortgage to buy the home you want in Florida. Make on-time payments regularly to show responsible use of credit. Your credit score may increase slightly every month as you make payments as agreed. You probably will not build a high credit score overnight. It will take time.

You may generate a credit score after as little as six months after you start making on-time payments. Your score may be affected by an excellent or poor older credit still on your credit reports. Adverse credit will be removed after about seven years. It takes about ten years for a bankruptcy to automatically drop off your credit report. Positive credit accounts will drop off a credit report almost ten years after it’s closed.

Every time you apply for new credit, that inquiry will appear on your credit report and will likely drop your credit score, but not drastically. Checking your credit score usually does not affect your score if it’s a soft inquiry, so be careful who you do this through.

Tip 2: Mortgage Borrowers Need Verifiable Steady Ongoing Income

To qualify for a mortgage to buy a home in Florida, you will need to prove that you will have the continuous income to pay the monthly payment, even if you no longer work. If you are retired and collect social security or have other steady retirement income, you may qualify for a mortgage by properly documenting that income.

You can qualify for a 30-year mortgage even if you are 80 years old because rules prevent lenders from discriminating against borrowers based on their age. If you’re disabled, you can use the disability income you receive to qualify for a mortgage, as long as you can document certain information for the lender.

How to Qualify for a Mortgage If Your Income Comes From Self Employment

To qualify for a mortgage to buy a home in Florida, if your income is from self-employment from running your own business, you will likely need to document employment income in the same line of work for at least two full years. You will need two years of tax returns to prove income, along with a YTD Profit & Loss statement rather than showing W-2’s and pay stubs.

Income from employment income, you will need at least two years of employment without any gaps, will need to provide paystubs and W2’s for the past, current two years. If you have a job gap, meaning 30 days or more between jobs, you may have difficulty qualifying for a mortgage using your experience. There are exceptions for extreme hardship cases and must be detailed supporting documentation.

Getting a Mortgage Right Out of College

If you have never worked because you left high school and went to college, you may be able to qualify for a mortgage right after you graduate. For instance, if you have attended college for four years and earned a degree in business administration, and land a job in management shortly after graduating, the lender may treat the four years you were in college just the same as if you were working in that field for the past four years. If you spent two years at nursing school but took a job as a manager trainee at a restaurant, it may be two years before you can qualify for a mortgage because you did not become employed in the field for which you trained. Most mortgage lenders want to see at least two years of steady employment (or study in that field at an institution of higher learning and then work in that field) before they will consider granting a mortgage for a home or condo purchase.

Tip 3: You Will Need Money for a Down Payment and or Closing Costs to Get a Mortgage

Yes, there are some 100% mortgages available. A borrower will need some money for a down payment and or closing costs in almost every case. The borrower will almost always need money for the credit reports and appraisal fee required by mortgage lenders upfront, at a minimum.

If you are short on funds, there are instances where money from some non-profit organizations, funds from relatives (along with a gift letter stating the money is a gift and does not have to be repaid) and other sources that can be used to help a borrower who’s short on funds. There are specific types of mortgages such as VA, FHA, and USDA that usually require far less out-of-pocket money from a borrower. Not all borrowers will qualify for these types of loans.

Not all homes qualify to be purchased using a low or no money down mortgage. As a general rule, the less money required for a specific mortgage, the better the condition of the home being purchased. You will probably not be able to buy that handyman special or foreclosure using a low or no money down 100% mortgage loan.

The Bottom Line To Qualifying for a Florida Mortgage

If you have a very high credit score, have a solid long term proven income stream that will continue, can put at least 20% cash down, and still have lots of money left in the bank, every mortgage lender will be falling all over themselves to get you to borrow money from them. The lower your credit score, the less money you have to put down and will have in the bank afterward, and the shakier your income and work history is, the more work it will take to find the right lender who is willing to work with you to get you approved for a mortgage. Call me today to find the right mortgage program for your specific financial situation.