If this is your first home purchase then you will probably feel very overwhelmed.
Everyone you meet will a different idea of what you have to do in order to "get ready" to buy a house. Most of what you will hear will be conflicting, out-of-date information, or worst yet just plain bad advice.
The very first thing you must do is figure out where you stand financially. Deciding you want to buy a house and actually being able to do so are two entirely different things. Hopefully, you’ve already been thinking about your financial history - just a little bit I hope.
If not, you can be certain that during any home buying process every bank loan officer or mortgage lender you encounter certainly will. That's where these four questions below can help you.
They are what the U.S. Department of Housing and Urban Development (HUD) suggests you ask yourself when you are considering buying a house.
The Four “Get Ready” Questions
“How steady and reliable is my current income? Have I been employed consistently for the last few years?” - Having multiple jobs or being self employed are usually not red flags with most lenders, but they will likely want to see at least a year or two of a consistent income. But having a stable job or career is always viewed more favorably.
“How much debt do I have?” - Add up your installment debt. Include things like car payments, student loans, and ALL your credit cards. Be sure to include any loans you are a co-signor for as many people forget this. If your debt-to-income ratio is higher than 36%, then you probably will have difficulty qualifying for a good loan.
“How well do I pay my bills when they are due? Do I receive a lot of late notices?” - How you pay bills now may predict how you will handle your future mortgage payments. Mortgage lenders will definitely be interested whether you can comfortably manage your current payments.
“Do I have any money saved up? If so, how much?” - This can be regular savings, 401k retirement accounts, and money market accounts. Basically anywhere that you might have cash assets set aside that you can use for a down payment. Typically you need anywhere from 5 to 20 percent down to qualify for a conventional home loan.
So Are We Ready?
Well, mortgage lenders will decide whether or not you are a “good risk” for a home loan partially based on the questions you just answered above along with your credit score and history.
But as to whether or not you are really ready to start the process of buying a home?
That’s a question only you and your family can answer. But a qualified real estate agent can help you evaluate your financial health and recommend a good mortgage lending service.
If you have any questions about the home buying process or mortgage lending, we invite you to contact our home buying specialist, Rachel Alosky at 828.210.1684 or by email [email protected]
Author:Skye Streppa Phone: 828-713-5690 Dated: January 28th 2016 Views: 495 About Skye: Skye Streppa is an Asheville native who holds a wealth of local knowledge and a depth of character f...
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About The Streppa Team | RealtyAsheville.com: Homes for Sale
As a native of Asheville, NC, Skye has an unparalleled understanding of the local market and area. Honesty, integrity and a hardworking spirit are the very tenets that ensure Skye gets you the very best deal in every real estate transaction. That very business model has led to Skye Streppa being a multi-million dollar producer for Keller Williams for nearly 10 years running.
Starview Heights is a private gated community in the heart of Western
"When I returned from California in 2012, one of the primary goals I established was to buy a house. What has been a dream for 4 years finally became a reality today when I closed on a house which not only fits my budget but also suits my personality and idiosyncrasies perfectly. It's essentially a cabin deep in the woods with a creek running thru the yard. lol However, I am not embellishing or exaggerating when suggesting that none of this would have been possible without the help of my Real Estate Agent Rachel Alosky. Rachel is far too humble to take credit for the subtle influence she had in the process, but I cannot emphasize enough how much I appreciate her genuine and patient approach. Although she is confident in her ability, I don't think she has any idea exactly how talented she is. It was clear from the very beginning that she had my best interests at heart and understood that her success was intimately tied to helping me succeed which so many salespeople seem to rarely grasp these days. She was never pushy or focused on her own interests and was ALWAYS available anytime I needed her even for "stupid", "first-time buyer" questions which were in abundant supply during the time I was involved in a business relationship with Rachel. If you are in the market to buy or sell a home or just want advice from a genuine "salesperson" who is not just "in it for the money" then do not hesitate to contact Rachel Alosky at The Streppa Team! I had heard horror stories about buying and selling homes but with the help of Rachel and her team, the process was a breeze!"