- 1). Pull your credit report. Do this before you call any lender. If your mid-score is less than 680, chances of buying a combination mortgage are slim. If you find errors on the credit report you should dispute them, and this might help your score. This is not a quick-fix, however, so make sure to review your credit at least six months before applying for mortgage financing.
- 2). Check your finances. The least you need for a down payment for a combination mortgage is 5 percent, but be prepared to put down 10 percent or more. For example, if you want a $150,000 home, play it safe by having at least $15,000 in the bank, plus two months of PITI (principal, interest, taxes and insurance). Some lenders even require up to six months' PITI.
- 3). Prepare your documentation. This can be extremely tedious, but without the proper paperwork, you won't be able to buy a combination mortgage option. You'll need the last two years of W2's (full tax returns if you're self-employed), the last two months of financial statements on all accounts (including 401k and retirement), and the last 30 days of pay stubs from your employer.
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