2016 New Jersey first time home buyer requirements

2016 New Jersey first time home buyer requirements

Credit score

The lowest credit score to buy a house or refinance is 500. New requirements for both FHA and VA require a minimum credit score of 500.

• Fannie Mae requires a minimum score of 620
  
• Freddie Mac requires a minimum score of 620
• FHA requires a minimum score of 500
• VA requires a minimum score of 500
• USDA requires a minimum score of 580
• Portfolio requires a minimum score of 640

Debt-to-income

Debt to income ratios are the calculations underwriters use to determine whether a borrower can qualify for a mortgage. They are used to determine if you have the capacity to repay your mortgage.

The maximum debt to income ratio is 54.99% and a minimum credit score of 640. Most lenders will limit maximum debt-to-income to under 50% and some lenders to 45%.

Collection accounts

FHA does not require collection accounts to be paid off as a condition of mortgage approval. However, FHA does recognize that collection efforts by the creditor for unpaid collections could affect the borrower’s ability to repay the mortgage.

• If evidence of a payment arrangement is not available, the lender must calculate the monthly payment using 5% of the outstanding balance of each collection, and include the monthly payment in the borrower’s debt-to-income ratio.

New Jersey first time home buyer requirements

There are 6 different types of programs that you may qualify for. Each program has a different down payment requirement:

• Fannie Mae minimum down payment 5% with above 620 credit score
• Freddie Mac minimum down payment 5% with above 620 credit score
• FHA minimum down payment 3.5% with above 580 credit score 10% down payment with below 580 credit score
  
• VA zero down payment with minimum credit score of 500
  
• USDA zero down payment with minimum credit score of 500
• Jumbo loans minimum down payment 15% with above 720 credit score
• New Jersey first time home buyer requirements
• HUD homes for sale in New Jersey $100 Down Payment

What documentation will I need?

• Personal tax returns for the past 2 years with W2's
• Current pay stubs for the past month
• Bank statements for last 2 months (all pages)
• Latest retirement statement for each active account (all pages)
• Sales contract (purchase)
• Clear copy of Driver’s License (front and back)
• Clear copy of SS card (front and back)

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