You Can Buy a House! Here’s How to Get Financing
buy a house
Many people who can qualify for a mortgage mistakenly believe that they aren’t ready yet.
If you have a steady income and at least some credit history, there’s a good chance that you can buy a house.
Here are the steps you need to take to secure financing and make your dreams of homeownership a reality.
Prepare by Paying Off Debt
Before you apply for a mortgage, you should take a couple of simple preparatory steps.
First, you should pay off as much of your high-interest debt as possible.
For most people, this will mean eliminating credit card debt and car loans.
Getting rid of these payments will leave you in a better position to make payments on a home, as well as bolster your credit score.
Lenders also take your debt-to-income ratio into account when making mortgage decisions, so reducing your debts will increase your chances of approval.
Build up a Down Payment and a Cash Reserve
Saving for a larger down payment will make you more attractive to mortgage lenders.
Although FHA loans let you get away with small down payments, a larger amount down can help tilt the balance in your favor for mortgage approval.
You should also save up a separate cash reserve since lenders will often require you to prove that you have enough saved to make payments on your mortgage in the event of a lost job or other disruption in income.
Figure Out What You Can Afford and Apply
With these two preparatory steps completed, you can get the necessary documents together and apply for a mortgage pre-approval.
Start by figuring out how much house you can reasonably afford, then get a fixed-rate mortgage through a lender like Right Trac Financial.
Fixed-rate mortgages are more predictable than adjustable-rate versions, allowing you to consistently predict what your payments will be for the entire lifetime of the loan.
Once You’re Pre-approved, Start Shopping
When your pre-approval comes through, you’ll be in a position to put in an offer on a home.
Even though your financing is now guaranteed, it’s still important to keep cost in mind while shopping.
If you can spend less than what you’ve been approved for, you can set yourself up for faster repayment once you’ve bought your home.
Although there is a process to it, getting financing for a home purchase isn’t as difficult as many people make it out to be.
By following these steps, you can make yourself an attractive risk for a mortgage lender and get the money you need to buy a house.
Category: Housing
