Posted On: October 4, 2019
First time home buyers, we understand that buying a home can be a scary thing. That’s why we want to give you a list of things that help show you that you’re ready to take that step to buying your first home. Also, maybe this isn’t your first house, and you’re nervous about buying another, these indicators are right for you too!
Number One: Salary
When it comes to looking at a house, making sure you make enough money is huge. However, buying a house doesn’t mean you need to make six fingers. A quick way to figure out your max mortgage would be to multiply your annual income by 2.5, then add your down payment amount to that. That total should be the max mortgage you should be shooting for.
Number Two: Can you afford at least a 3% down payment?
When it comes to putting a large lump of money down that can be quite scary. Usually, a traditional down payment is 20%, but that isn’t your only option. Candice Williams, a real estate agent with the Re/Max Center in League City, Texas, had this to say:”The ideal down payment amount is 20% of the price of the home, because that’s the minimum amount required to avoid paying private mortgage insurance (PMI). But that’s not realistic for most home buyers, and shouldn’t stop them from pursuing homeownership.”
Number Three: Debt
You do not need to have zero dollars of debt to consider buying your first home. You can have debt and still get approved for a mortgage loan. Andrew Helling, an editor for REthority.com, had this to say:
“Lenders like to see a little debt. By paying down a car loan on time, you’re showing the bank that you are a responsible borrower.”
Number Four: Credit Score
The higher, the better when it comes to credit scores, however, anything over 580 (the cutoff of most loans) will help you get a loan. But, we do recommend having a score over 700.
Number Five: A Starter Home is Enough for Now
Consider that a starter home is not a forever home in most cases. With a lot of new buyers, they think that their first home should be their forever home. Also, consider looking for a house, for now, not the future. Let your equity build first and then look for that family home you dreamed of!
At SETCO, we are here to help you through the entire closing process, every step of the way. We offer the easiest, most secure closings in the Florida Panhandle, so you can rest assured that things go as smoothly as possible.
Ready to get started? Click below to contact your local Setco Representative!