Prepare to Finance a Home


First and foremost, when you have a desire to purchase a home speak with a lender. If you do not have a lender we are happy to send you recommendations for top of the line lenders in the reassure valley area. There are a few ways to prepare yourself to getting a home loan; 

  1. Use receipts and banking transaction history to create a budget that reflects your spending habits over a three to six month period. Utilizing this approach prepares you for managing your money during an unexpected emergency. 
  2. Determine your debt and collections. Lenders typically look for a debt load of 36 percent or less. When gathering this figure they do add in the cost of mortgage as well, which typically ranges to 25-28 percent of your net household income. This means that any revolving credit should be be around 10 percent of your debt or less. 
  3. Increase your income. Consistency is key when it comes to income in the home buying process. What’s even better than consistent income? An increase in income or savings. If you’ve been at the same position or job, it may be a perfect time to ask for a raise. 
  4. Start Saving. When purchasing a home you will generally need to have 20 percent of the purchase price of the home. Unless you qualify for a loan program that has discounts or grants. (speak with a lender to learn more) 
  5. Have revolving credit. I would recommend speaking with a lender to determine what type of credit will be best based on your circumstances. Typically lenders recommend a secured or normal credit card to build credit. 
  6. Speak with a lender to be pre-approved or pre-qualified for a loan. They will request you to gather many financial documents prior to being approved. You will also discuss which kind of mortgage will work best for you. 

Once you are pre-approved or pre-qualified for a loan you will be ready to start your journey towards purchasing your home. Your preferred Realtor will work hand in hand with your preferred lender until you are ready to purchase! If you have any further questions please let us know and we’d be happy to help you find the answer.