It’s cheaper to rent than buy.
There is no simple answer to the rent vs. buy debate. However, it is very possible you could save money choosing to buy rather than rent. In many instances, your mortgage payment could simply be lower than what you are paying in rent every month. Also, you need to consider the equity you would be building in your home. This equity could help you in the future by raising your credit or having equity to borrower against to pay off other higher-interest debts.
You need at least 20% for a down payment.
While putting more money down can lower your monthly payment, you do not have to put 20% down to get a home loan. Some other options include:
- VA Financing – loan programs start at 0% down.
- Guild 1% Loan – 1% down, with 2% equity gift from Guild (you do not have to pay back the 2% gift from Guild).
- FHA Financing – loan programs start at 3.5% down.
You must have excellent credit.
Having a couple hiccups in your credit does not mean that you will automatically be disqualified from getting a loan. Most loan programs allow scores below 700 if other conditions can be met.
- FHA Financing – minimum FICO credit score of 580
- VA Financing – minimum FICO credit score of 600.
- Conventional Financing – minimum FICO credit score of 620.
You won’t qualify for a loan if you have significant student loan debt.
Student loan debt is not a deal breaker when it come to getting a home loan. Your student loans are only one factor in calculating your DTI (debt-to-income ratio). This means that other factors such as the price of the home, down payment amount, and lack of significant small debts can all help in improving this score. Options such as changing your loan repayment schedule to a graduated plan based on your income could also help.
You should find the home you want before getting preapproved.
Getting preapproved before you house hunt puts you in a much stronger negotiating position when you do find the home you want to put an offer on. Having a Preapproval Letter from the Sinor Mengali Group before you shop means you can put an offer on a home right away, giving you an edge in competitive housing market where time is of the essence. In fact, many Realtors will require you to have a Preapproval Letter before you house hunt with them.
Being prequalified and preapproved is the same thing.
For a lender to prequalify you, they will collect basic information to determine what kind of loan you may qualify for to estimate how much you would be eligible to borrow. However, when the Sinor Mengali Group preapproves you, our Team has gone through the necessary in-depth checks and balances to ensure you are eligible for the home loan program you are using for your purchase. Putting in an offer on a home based on a prequalification instead of a preapproval can cause issues when you are in escrow because the other lender has not done all of the necessary checks and balances to ensure you actually are approved for your loan.