How to Get A Home Loan

Proof That You're A Tax-Paying, Income-Earning (Legal) Resident

Any bank is going to need to verify your income level and any debt you're carrying. To check this, lenders will ask for your key paperwork, which includes:

-Photo ID and Social Security card

-Proof of home payments (this could be rent) for the past two years

-Two years' worth of W2 forms and two months' worth of pay stubs

-Checking and savings account statements for the past three months

-A record of debts, including credit cards, student loans and car payments

-Records of any other real estate you own and mortgages you're paying

A Solid Credit Score

First, check your credit score for free. A credit score higher than 780 will get you a prime mortgage rate -- which is currently around 3.25 percent. A 720 credit score will still get you a great interest rate, but things get uglier from there. The absolute bottom of the credit threshold is a score of 620. If you're lower than that, most lenders won't consider your application.

How can you get your score back up? Keep renting for another couple of years, and during that time, pay off your credit cards and make timely payments on all of your loans (i.e. student loans or car loans). Make sure you don't miss any utility, cell phone or other payments by setting up online accounts so that your money is automatically deducted each month.

Check your credit score annually -- but keep in mind that any inquiries stay on your report for two years, so don't overdo it.