How do you know if or when you’re ready to buy a house or if you have what you need to get approved for a mortgage? Here are four questions to get mortgage ready if you’re considering buying a house.
Do I Have a Good Credit Score?
Having a good credit score will make getting a mortgage much easier. Having a strong credit score shows your willingness and likeliness to pay the mortgage. Therefore, it’s much easier for a lender to approve the mortgage loan. In addition, having a strong credit score will give you access to lower payments, lower rates, and better programs. However, you can still be approved for a mortgage if your credit score is less than perfect. FHA mortgages are normally more forgiving when it comes to a credit score, and they might approve your mortgage even though your score isn’t where you want it to be.
Tip: Did you know that nearly a third of Americans have a credit score under 600? Which may make it harder to get an affordable loan or credit card. Alltru Credit Union is here to help. Our Credit Builder loan will put you back on track.
Do I Have a Steady Job?
Having a secure job or a strong employment history can also help you become a homeowner. Lenders will need to see that your job is steady and can back the payments of your mortgage. Therefore, the longer you have been at a job, the safer you are in the eyes of a financial institution. On the other hand, if you have gaps of employment, multiple jobs in a year or declining wages, the less likely you are to be a candidate for a mortgage.
Do I Have Savings for a Down Payment?
Down payments tend to be one of the biggest concerns for first-time homebuyers. Having a healthy amount of money saved can make getting a mortgage much easier and it will open the doors for multiple programs. It will also make your payments lower. The larger the down payment, the lower your mortgage payment will be. Although it is recommended to have money saved for closing costs and a down payment, there are mortgage programs that do not require a down payment, like a VA loan or a USDA loan. There are also federal and state programs that have down payment assistance for a specific population and ZIP code.
Is it the Right Time in My Life to Buy a House?
Even if you are financially ready to get a mortgage, it is also important that your goals in life are aligned. Am I moving any time soon? Am I starting a new business? Am I starting a family soon? These are situations that can bring large expenses to your life and make it difficult to make your mortgage payments. Having these questions in mind will help remove some of the stress and uncertainty about considering homeownership. While it’s exciting to start the adventure of buying a new home, it is important to know what your needs are, what your wants are, and how much you can afford. We can help you through the process! And if you feel confident after answering the questions above, then it may be time to get pre-approved, find a realtor, and start shopping for homes.
Until next time,