For many of us, getting into debt is the single largest financial nightmare that one can experience. After all, things were so simple when you were a high school student living in your parents’ home. You didn’t have utility bills or student loans payments to make. You may or may not have had to make car payments, but you still didn’t have to pay rent on a monthly basis. Now that you would like to enter the world of home ownership, you are very aware that you’ll probably have to procure a mortgage. This can seem like a scary undertaking, particularly if you have ever had to make car payments of student loan payments for a number of years. How can you balance your finances and not find yourself deep in debt? Not only will you need to make mortgage payments, but you will need to maintain your home and occasionally pay for repairs. It’s advisable to save for retirement as well, so you’ll need to budget. Today, we would like to discuss the steps you can take now to financially prepare for homeownership.
Pay Off As Much Debt As Possible
If you find yourself knee-deep in credit card debt and car payments, then now is not the time to buy a home. In order to obtain the best mortgage loan rate today, you need to keep your debt-to-income ratio as low as possible. In fact, you might not even be able to procure a loan at all if your total debt combined with mortgage payments are greater than your income. If your debt-to-income ratio is not looking so great right now, don’t be discouraged. Keep paying off as much of your debt as possible, and you might be eligible for some really great loan rates in the future.
Pay Your Bills In A Timely Manner
We’ve all most likely made the mistake of forgetting to pay a bill on time, particularly if the due date occurs during the weekend of while you are on vacation. However, failing to pay your bills on time could prevent you from receiving the best mortgage loan rates, particularly if this happens rather frequently. If you find yourself having trouble keeping track of your bill payments, you could set up automatic bill payments to pay them on time.
Work In The Same Place For Two Years
Most loan applications require you to work at the same location for at least two years in order to procure a mortgage. However, there are exceptions to this rule; if you obtained a high-paying job or you recently finished graduate school, you might be able to receive a loan.
Don’t Buy On Credit
Don’t buy anything on credit or apply for lines of credit before obtaining a mortgage. Remember, you need to be as financially responsible as possible at this time, so buying on credit would only hurt you.
We hope that these guidelines help prepare you for buying your dream home. When you feel ready to finally begin the process, contact our mortgage loan company in Scottsdale for a free appraisal. Our salary-based mortgage specialists work with a large number of financial institutions to find the best mortgage rates today.