Buying a home is one of the most important decisions that you will make in your life. You need to plan and prepare for this significant commitment so that you can get the best loan possible and move into your new home with no worries! This blog post will share six things that could make it harder to get a home loan – what they are, how they affect your ability to buy property, and what you can do about them.
Bad credit is one of the most common reasons that homebuyers are denied mortgages. A credit score below 620 is considered low, which means that the rates for borrowing money can be hefty, and there may not even be a loan available to you in the first place (depending on the program).
Too much debt
Large amounts of debt can make it challenging to qualify for a mortgage, no matter your credit score. This can be because lenders are looking at how much money you spend every month versus how much income you have coming in. Too many borrowers live paycheck-to-paycheck and don’t have any savings – something they may not even realize. Before putting items on credit, see if this is something you squeeze into your budget.
Not enough savings for a down payment
While not needed on all loan programs, some lenders require you to have money on hand for a down payment. This can be difficult if you start with no savings or any financial cushion, which most first-time homebuyers don’t usually have. Luckily, many down payment assistance programs can help you get your foot in the door.
A low-paying job
Not enough income can be a significant hurdle for first-time homebuyers. If your job doesn’t pay enough, it may not be possible to qualify for a mortgage because you don’t have the income needed to cover monthly payments and other bills – such as utilities or food. Ideally, if you want to buy a house on your own, you should keep your expenses as low as possible and your income higher.
Keeping the same job is key to qualifying for a mortgage. If you don’t have stability, it can be hard to be eligible for home financing because if your income changes and the bank doesn’t know how much you’ll make in the future, they might not approve you for a mortgage. This is because it is risky to lend to someone who may be unemployed shortly.
If you find yourself in any of these situations, it may be difficult to purchase your first home. But don’t worry! We have the tools and resources to provide you with the financing necessary for securing your new place today.
We’re here to help make this process as pain-free as possible for you. Click here and schedule your pre-approval meeting today so our expert team can get started on providing you with all the information needed to buy a home today!