Right now is one of the best times to buy a home. Prices are rising and forecasters are projecting this trend to continue for the foreseeable future. This makes owning a home not only a place to live but a good investment as well. So what are the steps needed to get a home?
Pay Down Your Debt
One of the most important things Mortgage lenders look at is your “debt-to-income” ratio. Your “debt-to-income” ratio refers to how much debt you have versus how much money you make. Let’s say you take home $5000 a month and your payments on your debts equal $2500 then you ratio is 50%. The lower the ratio the better, and most lenders would like to see a “debt-to-income” ratio at 30% or lower. So if you have a lot of credit bills it is best to pay those down.
Fix Your Credit
To get a home you will need a credit score over 580 at least for the most forgiving loan but generally over 620 for most loans. These are the bare minimum credit requirements for getting a mortgage. The higher the credit score the better the interest rate you will have and the less you will end up paying. If you have poor credit we have a great program to improve your credit score to mortgage ready in just six months. Call us at 888 799 7267 for a free consultation.
Save For A Down Payment
Depending on your credit score at time of approval and what loan you qualify for will determine your down payment. Down payment can range from 2% of the value of the home you buy all the way to 20%. If you don’t have any money set aside then you will not be able to get a home.
Get Pre Approved
Once you have the credit score you need, low debt, and money saved for a down payment then you can contact a bank to see how much home you qualify for. Most banks will give you a letter on just what you qualify for and you can use this letter to speed yourself through the buying process.
Find An Agent
After you have completed everything else and are pre-approved for a loan it is time to find an agent. When deciding on an agent be sure to ask questions. Find out just how long they have been working in the area and get a list of their most recent sales and purchase.
After you have found an agent go and find the home of your dreams.