November 9th, 2017 7:03 AM by Jackie A. Graves, President
If you’re a first-time home buyer, you might think you’re not
ready to purchase a house. Perhaps you’re concerned about your job situation,
your previous credit history, or your high monthly expenses. Whatever the
circumstances, every borrower and financial situation is unique.
you’re a financial expert, it’s best not to self-diagnose your financial
problems. You wouldn’t skip out on the dentist to fill your own cavities, so
don’t try to solve your financial troubles yourself either. A loan officer can
walk you through your options—and they won’t try to drill your teeth!
When you apply for home loans, mortgage loan officers look at your credit score, credit history, monthly liabilities, income, and assets.
These officers see the entire financial picture, not just the investable funds.
A reputable loan officer with experience can get you on the right track for
buying a home.
Here are three common reasons people don’t want to apply for a
mortgage and what you should do if you’re really serious about buying a home.
reality is that mortgage companies are required to pull a copy of your credit
report, which includes scores from all three credit reporting bureaus. Your
credit report is the most accurate representation of your credit available.
Don’t let your messy credit report keep you from talking to a lender. After
looking at your credit report, the lender can actually tell you what debts are
the biggest drain on your borrowing power so
you can start making smart financial decisions to improve your score.
Not enough income
Let the mortgage company review your pay stubs, W-2s, and tax
returns for the last two years. If you were self-employed, let the loan officer
look at your tax returns and evaluate your credit to determine what down
payment you can afford and what you can buy. The lender can give you an idea of
what you need to do to qualify, including how much more money you need to make
to offset a proposed mortgage payment. With an action plan and a strategy in
place, it may just take you a matter of months to button up your financial
picture to qualify.
and liabilities definitely impact spending power. Every dollar of debt you have
requires two dollars of income to offset it. So for example, if you have a car
loan that’s $500 a month, you will need $1,000 a month of income to offset that
monthly liability. If more than 15% of your income currently goes toward
consumer debt, you’ll have to either pay off debt or get more income—perhaps
via a cosigner—to qualify for mortgage financing. Again, let the lender look at
your financial picture so they can tell you what it takes to make it work.
you’re planning to buy a house in the
future but aren’t financially ready, talk to a professional. Meet with them
face-to-face, provide them with all of your financial documentation, let them
run a copy of your credit report, and go through a pre-home buying consultation
so they can either pre-approve you or tell you what to do to become
pre-approved in the future.
times, potential buyers are not ready, but having a conversation with a
professional—so you know where you stand and where you are going—can be
tremendously beneficial. You can also take a look at your financial health with
a free credit report from
Credit.com – To view the original article click here