After you receive copies of your credit report, you need to check them out for errors or any inconsistencies that might be disputed and corrected. The actual FICO score will not be included when you get your free credit reports so you will need to purchase that separately. This purchase will be well worth it since the new FICO score that lenders are looking for is anything above 720. It’s important to learn your score before applying for a home mortgage. The rule is the higher your score is above the 720 number, the greater leverage you have for scoring a low interest rate and more favorable home mortgage terms.
In the event you do not qualify for a loan right now there are agencies to help low-income people qualify for home mortgages by educating them on the application and loan process. You need to research the agencies’ requirements to determine if you are eligible to participate in any home mortgage and home ownership courses or classes to better prepare you and assist you in resolving any issues in advance. Places to find such programs include the Urban Development Department and the Department of Housing and your state’s Housing Finance Agency. You should also research your local housing department and local yellow pages for similar programs. Be sure you scrutinize the credentials of any program and verify with the state agencies so that you are not defrauded. Additional areas of discussion in these programs are the reasons you are buying a home, your level of debt, and your income level.