If You Can Afford to Rent…Then You Can Probably Afford to Own.
The cost of renting in many areas is now greater than the cost to buy. Even with mortgage rates on the rise, it is still more affordable than renting. Some say mortgage loans are impossible to obtain without perfect credit and/or 20% down.
Want the truth? Read on, and we’ll cite the three basic factors for qualifying for a home loan.
- Income – If you have a job or steady source of income, you’re off to a great start. If you’re already able to pay your rent on time each month, this could actually be easier than you might think.
- Assets – You rarely need a 20% down payment. In reality, many programs will work with 5%, 3.5% or 3%, and in some cases, even 0% down. As well, closing costs can sometimes be paid by lenders, sellers or come from gifts or grants. So if you think you’re out of luck just because you don’t have tons of cash, no worries. Chances are still good there’s a solution that may work.
- Credit – Your credit is likely in good shape if you pay your bills on time and have avoided major issues like bankruptcy, foreclosure, short sales and judgments. Requirements will always vary, but there can still be reasonably flexible loan options, such as the FHA and Fannie Mae which both allow for low credit scores.
That’s it. These three items are the fundamentals of mortgage lending. Exceptions will exist, but don’t be fooled into thinking the process is impossible. For those who work and pay their bills, there may not be a whole lot standing in the way of homeownership.
Here is an example of Buying a home vs. Renting based on today’s mortgage rates with the plan of selling your home in 10 years.
I would like the opportunity to consult with you and start you on the path of Homeownership. Whether it be for Today or planning for Tomorrow!