The Importance Of Credit Score For Home Ownership

If you have considered applying for an FHA loan, then you should become familiar with the FHA requirements so that you know what to expect. There are plenty of good reasons to choose FHA over conventional, so whether you are a first time homebuyer, or you are wishing to refinance your current home loan, you can talk to a professional about getting approved for an FHA loan. The FHA loan requirements make it clear, that your first step is in knowing how much you can afford when considering buying a home. For this, there is a specific calculation that compares your current gross income to your existing debts in order to provide a maximum loan amount that you can qualify for. The guidelines are such that it forces to consider what can fit into your budget rather than focusing on what the maximum is you can borrow. Whether you are purchasing a home, or refinancing your current home loan, your FHA loan will be built around having a reasonable debt to income ratio, so what you budget for is important. The second step is getting qualified. In a sense, you will still have to qualify even for a refinance. An FHA loan is not necessarily based on credit score, but it is based on several factors. Pay history, job time, and income are all a part of what helps you to qualify. The FHA requirements want you to show that you have the ability to repay the loan. Your loan will be driven by the documentation that you can provide, such as w2 's, tax returns, insurance, and above all good pay

Home ownership is the American dream! It is one of the most costly purchases an individual or family can make in their lifetime. Some people save until they have cash to purchase however, many people borrow money from a bank or lending institution; when a person borrows money to purchase a home the loan is called a mortgage. The lender is called the mortgagee and the borrower is called the mortgagor; banks have several different types of mortgages: fixed rate mortgage, adjustable rate mortgage, investment mortgage and much more. Borrowers have to undergo the lender underwriting process to show financial capability of repaying the mortgage (Makarov & Plantin, 2013). In this article I will use a fictitious person named “Julianna,” she is in the process of buying her first home at age 30; I will be her lender and will use mathematical procedures to find out what is her down payment, principle, installment payment, points (closing cost), mortgage maturity value and total interest paid.

In previous years homeownership is was what people in the United States showed pride in, up until recent years after the fall in the market economy. The current homeownership in the United States have declined significantly since the years have passed and is now the lowest it has been in decades. Even though the housing market has been improving over the years in the United States, and the increasing homeownership rate is a worthwhile policy goal for America, home ownership still continue to decline.

Prior to the 2008 economic depression, obtaining a mortgage was relatively simple for home buyers. However, many of those mortgages had provisions that made it difficult for borrowers to repay their mortgages (“Dodd-Frank,” n.d.). As a result, many homeowners lost their homes when they were unable to repay their mortgages, which led to the real estate crisis. In 2010 the Mortgage Reform and Anti-Predatory Lending Act, also known as the Dodd-Frank Act, was enacted to reform how mortgage servicers vetted borrowers and to eliminate the use of predatory loan practices (Cheeseman, 2013, p. 485). Under the Dodd-Frank Act, creditors must establish borrower’s credit history, income and expected income, debt-to-income ratio, and other factors before

The desire for home ownership is something embedded in our DNA. Claiming property and owning a house is a critical part of the “American Dream.” Home ownership represents more than just a place to rest your head at night. Your home is the environment that serves as a setting for your journey through life. It’s the place of your children’s first steps, family birthdays, barbeques, amongst many other significant events. Your home is the backdrop that describes you and your family. Although many American’s were financially hurt by the trillions lost in the home equity market during the housing bubble, there is and will always be a desire to own a home. The most vital part is that American’s who lost their homes during the crash, learn from their past, so that they do not repeat a foreclosure.

Europe and elsewhere to the United States, and from the east to the west within the

Before one can even think about buying a home, the first thing that person has to do is check their credit. Credit reports are analyzed by three major credit agencies, TransUnion, Experian and Equifax. Having a low or bad credit score can hinder potential buyers from getting an excellent interest rate, or getting financed at all. Next step is to set your budget, you have to determine how much you will be able to afford. “Its best to target a home that cost about two-and-a-half times your gross annual salary. All of your monthly payments should not exceed 36% of your gross monthly

Second, build a nest egg or cushion that will have at least six months of living expenses in it. This will show stability to a potential loan officer in case of another possible job loss and tells the loan officer that you are serious about owning a home again.

No one really realizes the time and patience it takes to get a first time home buyers loan. The first and most critical step in homeownership is getting the right mindset. This principally involves

If you are a first time homebuyer and you have no idea if you are a good candidate for a mortgage, take the steps to get pre-qualified by a mortgage lender, and then get pre-approved. There is a difference between getting prequalified and pre-approved, and by getting pre-qualified you can determine if pursuing a mortgage will be worth your efforts. For the pre-qualification process, you will be asked a variety of questions about your income, debt, credit score and rating, and other information. This allows the mortgage lender to get enough information to decide if you could be a potential candidate, and what you could afford.

Analysis: But sometimes buying a house isn’t the best choice. It’s a long-term commitment that requires the homeowner to have a stable and secure job. If you default on your mortgage, for example being late on your payments or even missing payments the mortgage lender can take your home away. Then the lender can sell your home resulting as a foreclosure. Foreclosure also affects your credit making it harder or almost impossible to purchase a house in the future.

Paying for a house is not easy. Buyers should learn to budget their salary and make sure they have money to pay for the mortgage, bills, daily expenses, and for emergencies. Tim Kirchner former vice president of MetLife Bank said that if you really want to have a house, it must be your priority. He also added that "most people need to sacrifice a little and stick to a budget in order to save for a home."

Do first-time buyers have it desperately tough in this day and age? Darn right they do because the cost on housing is subject to a massive unsustainable bubble, and yet government groups and even banks keep trying to make it easier for first-time buyers to get a mortgage, which in turn keeps the cost of houses prohibitively high. If you are finding getting a mortgage really tough as a first-time buyer, then thank your lucky stars because it may mean that one day may you be able to afford a house of your own because the price will have dropped. Here are some tips and plenty of advice to help you get your first mortgage.

Owning a house has become more important than simply having a place to live, or making a sound real estate investment in our society. Buying a house has become an integral part of the American dream. No matter if you are male or female, young or old, rich or poor, what culture or country you are from, everyone has a dream about it; in other words, every one of us wants to own a place that we can live in and create memories in that will last a life time. For a first-time homebuyer, that dream can quickly turn into a nightmare. The whole home buying process can quickly overwhelm the average individual. You’re entering into what could be the biggest purchase of your life with no experience to fall back on. The good news is a little preparation can go a long way and help you approach this decision with confidence. Luckily for you, I have taken the liberty of putting together a guide for the first-time homebuyer. Throughout this guide I will take you step by step through the daunting process of buying a home.

So many dreams of owning a home come to fruition because of the possibility of attaining a home loan. Home loans truly do make some beautiful dreams come true. Nothing like the joy of buying your own home, and living it up in it. It’s an achievement to be mightily proud of, in this day and age.