09/23/2022
It's no secret that when it comes to buying a home, your finances play a HUGE role! Be sure you're financially fit to become a homeowner. Generally, the following criteria is evaluated during the application process:
- Work History: We'll want to see at least 2 years of W-2s (or tax returns, if you're self-employed.)
- Credit History: Of course we like to see high credit scores but don't fear, there are loan programs out there that accept credit scores as low as 500, provided you meet the other eligibility requirements.
- Debt-to-Income Ratio (DTI): This ratio tells us how well you'll be able to take on more debt in the form of a new house payment. A general rule is a ratio of 43% or less.
- Cash Reserves: Typically, we want to make sure that you have enough money in the bank to cover your mortgage payment, even if you lose your income. Generally speaking, 3-6 months' worth of mortgage payments in savings.
Chances are, if you have a stable income, decent credit score and some savings in the bank, you have a good chance of being ready to buy!
