There are pros and cons when renting a property, but the cons outweigh the pros. The biggest drawback of renting a house is that you don’t get something valuable in return, especially now that rent prices continue to increase. Why not take steps to own a house?
Even if you think you’re not “there” yet due to your finances and other situations in your life, there are things you can do now to become a home buyer.
1. Start Saving for a Downpayment
Unless you’re a veteran or you qualify for a VA loan, you need to think about the downpayment when you take out a mortgage. This is the first thing you need to save up for.
That’s why it’s a good idea to have an idea of the average down payment lenders require for home loans. One thing’s for sure; it’s going to be a lot of money. Therefore, you need to be able to prepare for it.
Little savings can go a long way. All you need to do is stick to it, and eventually, you’ll have enough money saved up to pay for a down payment.
2. Check Your Credit Score
Your credit score will affect your loan eligibility. A poor credit score may either make you not qualify or incur a high interest rate. As early as now, check your credit score so you can make the necessary improvements to increase it to the ideal level.
The minimum credit score for FHA loans is 580, while conventional loans have a minimum credit score requirement of 620.
3. Ease Up on the Spending
Those unnecessary big purchases you’re eyeing could probably take a backseat for a while to make way for a more important investment. When you apply for a loan, lenders will also assess how financially sound you are, and if they see you have frequent big purchases, then this may not put you in a good light.
Also, try not to open any new lines of credit this time. Otherwise, lenders may think that you don’t have enough money like you claim you do.
4. Know How Much You Can Afford
Before you get pre-qualified for a loan, you can use an affordability calculator to give you a general idea of the price range that will suit your budget. Doing so will also help you find cheaper options for you and will also help you determine if you’re at the best time to apply for homeownership.
5. Get Pre-Qualified
Finally, the last step is to get a pre-qualification from the lender of your choice. This will give you a more precise amount of how much you can loan that you can use to budget your finances. It’s also a good idea to know whether you’re eligible for a loan or not.
Conclusion
Renting can only do so much to your finances. Now is the time to think about owning your property to secure your finances and ensure a huge chunk of money is going to something valuable you can use later on. Use these steps to help you prepare for a homeownership and start talking to mortgage experts today.
It’s time to own a home today! Pennix Mortgage is one of the best mortgage lenders in Cumming, GA. We make sure we match you with the right mortgage to get the best loan. Contact us today!
