1. MAINTAIN A STEADY, RELIABLE INCOME

Changing jobs frequently or right before you apply for a mortgage may make it harder to qualify. When determining your ability to afford the mortgage, Habitat can only consider earned income that is claimed on your Federal Tax Return.

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2. REVIEW YOUR CREDIT & PAYMENT HISTORIES

Habitat Tuscaloosa does review the payment history and credit reports of applicants. This will include reviewing your payment history on your regular household bills (such as electricity, water, etc.) and pulling your credit reports.

 

Habitat highly recommends that you review your full credit reports (Equifax, Experian, and TransUnion) prior to applying. Although Habitat does not have a minimum credit score, we will look at your payment history, how much you owe (including student loans and loans you co-signed on), past due amounts and collections, etc.

 

You can get a free copy of your credit report at annualcreditreport.com.

 

Need help understanding your credit report or disputing accounts? Visit Consumer Financial Protection Bureau/credit report to learn more. 

 

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3. TAKE A HOMEBUYER EDUCATION COURSE

Homebuyer Education is a great way to determine if you are ready to be a successful homeowner. A quality homebuyer education will help you review your income, credit history, and debts to identify any issues that may prevent you from qualifying for a mortgage. Below are a few options for getting individualized counseling or coaching as you prepare to apply. When reviewing applications, preference will be given to applicants who have completed a homebuyer education course within the previous 12 months. 

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• The City of Tuscaloosa offers free HUD-certified housing counseling. Tuscaloosa residents may access housing counseling services by calling 205-248-5080 or emailing housingcounseling@tuscaloosa.com. 

 

 

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• Habitat is excited to partner with HomeFirst, a financial wellness initiative offered by The University of Alabama’s Center for Community-based Partnerships for individuals and families who are on the path to first-time homeownership. Visit http://ccbp.ua.edu/homebuyer-readiness-pathway/ to request a meeting and learn more.​

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• Other organizations also offer this service online, generally for a fee. Many local banks and credit unions offer free homebuyer or financial education courses. These are a good way to learn about homeownership, mortgages, and resources that are available.

 

4. START BUDGETING AND SAVING FOR THE DOWN PAYMENT

Start preparing financially for homeownership by opening a savings account and saving for emergencies and a down payment.

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Visit Consumer Financial Protection Bureau/budgeting for tips on creating and sticking to a monthly budget.

 

5. GATHER YOUR IMPORTANT DOCUMENTS

Below is a list of some of the documents you may be asked to provide if your application meets our minimum guidelines. Every situation is different; therefore, you may be asked to provide additional information.

• Last two (2) years of tax returns if you have employment or self-employment income

• Most recent three (3) months of paystubs and/or benefit letters

• Most recent two (2) months of bank statements

• Social security cards for all household members

• Driver’s License, state-issued Identification Card, Passport, or Permanent Resident Card for all adult household members