Signs That Tell You You're Ready To Buy a House
posted on Thursday, November 24, 2022 in Financial Tips
Purchasing a home is one of the many long-term financial goals for a lot of people. Shifting from renting a home to buying one can be a liberating experience. However, there are some signs you need to look out for to learn if you are ready to become a homeowner. These include the following:
You Have a Steady Source of Income
Whether you’re currently employed or you have a business, having a steady source of income is a crucial thing to keep in mind when it comes to purchasing a home. That’s because lenders and financial institutions will ask to see some proof of income so they can be sure that you’ll be able to finance your mortgage. It can be in the form of tax returns, statements, or pay stubs.
You Have a Good Credit Score
Aside from asking for your proof of income, financial institutions and lenders would also require aspiring homeowners to have a good credit score. One of the reasons why some mortgage applications get rejected is low credit scores. Although some people can still qualify for some loans if they have a score of 500, they’ll be required to make a higher amount of down payments.
Credit score requirements tend to vary per lender, but it’s recommended to have a rating of 620 and above. If you have a higher score than that, you may be able to get a loan with better interest rates.
You Can Afford To Make a Down Payment
Another requirement you’ll need is to have a down payment ready, the percentage of your home’s price you pay upfront when getting a home loan. The down payment that you will make allows your lender to determine how much they can lend you and what kind of mortgage fits your needs. This can also influence how much interest you will get for the loan and your monthly payments.
Your down payment percentage may vary depending on the loan program. Typically, it may range from 5% to 20%.
Becoming a homeowner is a major decision that will have a lasting impact on your future. If you feel that you’re ready, contact us at Community 1st Credit Union. Talk to one of our C1st representatives to learn more about the loan options that can help you purchase the house of your dreams.