Reasons to Buy
- Apply for a fixed-rate mortgage loan and your monthly moments won’t go up for the life of the loan, unlike rent which is more likely to keep increasing.
- Monthly payments build equity for you.
- Your mortgage interest might be tax-deductible. To learn more about this and if your property taxes and mortgage points qualify also, speak with your tax advisor to learn more.
Reasons to Rent
- If you’re not ready to settle down in one location, or may be relocating soon, renting is a short term commitment.
- Repairs are performed and paid for by your landlord
- If your rent payment is late, your credit score won’t be affected
After you’ve taken some time which is the best option for you, and decided buying is the way you want to go, first take a moment to check your credit score. This will have a huge impact when you go to apply for your home loan. The lowest credit score you can have, and still (possibly) get a mortgage loan, according to the FHA is 580. However, your interest rate will probably be a lot higher and other fees may apply.
To learn more about your credit score and if you qualify for a home loan, speak with your bank, credit union, or mortgage lender. They can answer all your questions and help you decide your best course of action.
Once you know your credit score, take some time to organize your paperwork. Applying for a home loan is a long process and requires a lot of financial information. In most cases, mortgage lenders require the previous W-2’s from the past 2 years, tax returns, 2 recent pay stubs, and the past 2 months of bank statements (every page). The more organized you can be in your paperwork, the less stress you’ll have in the mortgage process.
As you continue down the path towards home ownership, decide how much you can afford. Again your bank, credit union, or mortgage lender can give you further information and insights, but help give you some idea, there are mortgage calculator tools you can use to get an idea.
Once you’ve learned how much you can afford and have been pre-approved for a home loan, hire a real estate agent to help you navigate the home buying process and find your dream home. This is a huge investment you’ll be making and you’ll want to make sure you’re choosing the right home for you and your family.
Ready to buy? Give us a call today! We are here to answer your questions and assist you in making your homeownership dreams come true.