Are you ready to buy a home?
Some people start with just browsing homes online. They see what’s available -or what’s not. Some might determine that they probably can’t afford a home, others guesstimate they can afford more. To be sure, turn to a trusted lender and learn exactly what your options are.
1. Have you checked your credit?
Many credit card companies provide now your credit score. It’s a great guideline, a good online resource is also CreditKarma.com to gauge your credit score.
You should check your credit report once a year anyways, so you could roll this as well. There are 3 big credit report companies, you have a right to view your credit report for free from one of each of the companies. This will also give you an idea if you have any “blemishes.”
570 – Seek out professional credit repair
580 – Fixable but it may take a few months of credit work
600 – Getting closer
620 – Very possible but you may have limitations
640 – Let’s rock & roll!
2. Have you been pre-qualified with another lender in the past 6 months?
If Yes – great, you are probably still qualified to buy
If you tried but did not qualify, did you take the suggested steps from the other lender? If not, you may still have the same challenges.
If you have not spoken with a lender at all, getting your financial baseline is where you NEED to start. I do see a lot of buyers starting their home search where they THINK they are or should be. Since most consumers are not aware of how credit companies and banks/mortgage providers are evaluating your credit scores, or score certain kinds of income, you might be in for a surprise if you don’t speak with a lender before you start with your home search.
3. Are you employed or Self-Employed?
- Employed – Two years same line of work
How long have you been in your line of work?
- If you are an employee, you do not have to be at your current company
for two years, but you need two years of consistent experience in your field. Schooling counts toward experience.
- Self-Employed – Two year history.
You must be in your current company for a minimum of two years. Read: Mortgages for small business owners.
4. Do you have a down payment?
- If No – most loan programs require a percentage of your own funds. You will need to figure out where your down payment is coming from.
Save up money
Borrow from 401k
Gift from close family
Note: REALTORS, Lenders and sellers are not allowed to contribute toward your down payment, but might enable you to provide a down payment by giving you a credit towards your closing costs (all in accordance with your lender)
- If Yes – what is the percentage? There are certain requirements per loan type
- Conventional = 5% +
- FHA = 3.5% down payment or grant(s), down payment assistance
- VA = 0% down payment
- USDA = 0% down payment (only available in certain areas of the County)
- Fannie Mae/Freddie Mac
Did you find out if you are ready to buy a home now….later? Or that you can move forward with your home purchase? If you want to move forward, make sure you give me a call in order to get you started on your journey and get you to your goal: Home Ownership.