It's all over the news. It is a buyer's market in real estate right now. Best time in years to buy a home. So why haven't you? Somewhere in our educational process, we are failing to teach people about personal finances. Did you know...
1. You need a credit score around 650 in order to get most mortgages today. There are a lot of factors that go into your credit score, but you need to pay your bills on time. You also need some credit that you repay on a regular basis. A mortgage professional can help with more specifics if you need to establish or repair your credit score.
2. You need a minimum of 3.5% of the purchase price for a down payment (.035 x purchase price). You could also need money to purchase your homeowner's insurance and start your escrow accounts (you pay monthly into your escrow so you will have the money to pay property taxes and insurance when they come due). Most of the 0% down loans are gone.
3. You need to keep the percentage of your income low that is committed to paying off your debt. The mortgage company will look at your debt to income ratio. Total monthly obligations should be in the range of 28-44% of total income including house payment. If you are trying to buy a home, don't go on a credit spending spree that will negatively impact your ratio.
4. Two years of steady employment in the same job or field.
If you want to buy a home and need help in the process, contact a realtor or mortgage lender. They can help you get ready if you aren't already. Don't let this incredible time to purchase pass you by.
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