You’re tired of renting, and you’d love to start putting your hard-earned money toward your own Orem home. But are you actually ready for a mortgage loan?
Whether you choose to rent or buy, the decision will affect your financial position and your life goals. But if you sign a lease, you’re likely only making a one-year commitment. If you buy a home, the burden is bigger — you generally need to commit to at least a few years to keep from losing money on the purchase. So, before you take any steps toward getting a mortgage loan, you’d be wise to consider the following questions.
Is Your Income Consistent?
Making on-time mortgage payments is vital if you want to remain in your new Orem home. Before you apply for financing, consider your income. If you have a reliable source of money entering your household, you might be ready for a mortgage loan. If you recently switched jobs or your income is currently inconsistent, that could make it more difficult to secure a home loan.
How Good is Your Credit?
Your credit history and your credit score will both have a major impact on your ability to buy a home. Having not-so-good credit doesn’t necessarily mean that you won’t be able to get a mortgage loan – but it may limit your options. Plus, the higher your score and the more solid your credit history, the more favorable your home loan rate and terms are likely to be. As such, better credit can mean big savings.
Can You Afford to Be a Homeowner?
Buying a home is an expensive undertaking, and you need to be realistic about how much money you can afford to put towards housing costs each month. You may be prepared for loan payments, but have you given thought to homeowners insurance? Property taxes? The costs of maintaining a home? If you believe you can afford to cover all of those expenses without spending more than 28 percent of your pre-tax income, you may be ready for a mortgage loan.
Do You Have a Rainy Day Fund?
If your financial situation looks to be pretty stable, becoming a homeowner is within your reach. Before you start searching for a mortgage loan, however, you’ll want to stash some money away. You never know when an issue will arise – and when things like roof leaks, appliance malfunctions and burst pipes occur, you’ll need funds to resolve the problem right away. With a decent amount saved up, you’ll be prepared for just about any unexpected household expense.
Are you all set to become an Orem homeowner? Or do you need advice on how to get ready for a mortgage loan? Either way, Intercap Lending is happy to help – contact us today!