If you look up “nitty-gritty” in the dictionary (yes, surprisingly it is actually in there), you’ll find the following definition:

: what is essential and basic : specific practical details :

With that foundation laid, the “nitty-gritty” of the mortgage process is really pretty simple. I didn’t say it is easy, but there are definitely some basic principles that you can follow to make your experience a good one.

First off, it’s OK to shop around. In fact, you’d be crazy not to. There is a sometimes overlooked provision in the FICO scoring formula that provides a window for “rate-shopping” without having an adverse impact on your credit. You should keep the shopping within a two week window if at all possible to ensure your intentions and actions are clear.

Secondly, you don’t absolutely have to have a big down payment to get a mortgage.

Does it help? Sure.

But even in today’s post-2008 world, you can get a conventional mortgage with as little as 3% down. FHA loans usually need a 3.5% downpayment. And for a VA or a USDA loan, you may not need a downpayment at all.

And lastly, your credit might be a game-changer? What do I mean by that? Well, it’s two fold —

1 —> Good credit can save you a fortune in the long run. That isn’t to say you can’t get a mortgage with less-than-awesome credit, but good or great credit can save you thousands, or even tens of thousands of dollars in interest.

2 —> Once you are moving through the process toward a home purchase, you must be very careful to avoid other things that could impact your credit before closing. If you agree to purchase a home, don’t go out and take a loan out on a new car in the time leading up to closing? While that advice seems elementary, it happens more than you might imagine. You want to avoid anything that will change your variables ahead of closing…period.

To summarize, getting a loan isn’t always easy. But it also doesn’t have to always be difficult either. Like most other things, getting a grasp on the basics will help you in the long run. Find the right loan officer, let them help you find the right loan product, and then bask in the light of knowing you are on the path to homeownership.

By Ross Kulik
VP of Missouri Market