So, you’re ready to buy a house? Think again!
Owning a house is everybody’s dream. However, not all of us has the capability to do so – even with the existence of available mortgage programs that offer affordable home purchase solutions.
Are you ready for a home purchase? Here are six warning signs that tell you not yet.
Your Income Is Not Enough To Cover For Your Monthly Expenses.
Getting a mortgage requires you to pay a monthly mortgage fee. If you have difficulties budgeting your monthly income even before applying for a mortgage, you can’t expect a mortgage lender to approve your home loan application.
With all your current financial responsibility such as utility bills, regular debt payments plus your everyday expenses, you need to have a good enough Debt-To-Income Ratio to get approved of a mortgage.
You Don’t Have Much Money In Your Savings Account.
If you’re buying a house, it is vital that you have more than just funds for the down payment. Even you’re applying for a home loan that requires a low down payment such as FHA Loans Arlington, and you still need to beef up your savings.
You also need to have the cash to cover for emergencies like home repair and maintenance. Not to mention, do you need to pay for other costs such as applicable taxes, closing costs and the first few months of monthly mortgage.
You Don’t Know How Much You Can Afford To Buy.
Buying a house is costly, but wait till you learn about the expenses you need to worry about not only during the home purchase but also before and after. This is the reason why buying a house requires research, careful planning, and extreme budgeting – and the first step you need to take is to figure out how much of a home you can afford to buy.
You Have A Poor Credit Score And A Bad Credit History.
If you have a bad FICO score, lenders will think twice about financing your home purchase. While some mortgage programs accept borrowers with a low credit score, that doesn’t mean you shouldn’t work your way into improving your score.
Good Read: Why Your Credit Score Is Important
Your credit report also matters as it will reflect the type of debt payer you are. Thoroughly check your credit history and clean it up before even passing your home loan application.
You Plan To Relocate Soon.
Home ownership is a long-term commitment – more so if you’re paying for it with a mortgage. If you have plans moving to another area after let’s say five years, then you’re not ready to buy a house.
Financial experts claim that it takes at least the five-year mark for you to even break even with your home purchase. Your payments will mostly go to interest during the first few years, meaning it will take longer for you to pay for the principal.
You Haven’t Shopped For Mortgage Programs And Lenders Yet.
Part of buying a house with the help of a mortgage is finding the best type of home loan that will fit your needs and situation. Not only that – you also need to find the right mortgage lender who offers that type of home loan you wish to apply and one who’s willing to help finance your home.
Recommended Read: Shopping Around For Your Mortgage Can Save You Big — Here’s How To Do It
Remember, not all mortgage programs and lenders are the same.