Are You Ready To buy A Home?
It takes a lot more than what most people think to purchase a home, especially if you are a first time home buyer. A potential home buyer has to have good credit, financial savings, budget, and normally having a knowledgeable real estate agent and logical reasoning can help quite a bit.
Since most first time home buyers have a small amount of savings and a low budget a FHA loan is usually the most appropriate loan for them. To get an FHA loan a home buyer has to have been on a job or jobs within the same industry for two years and have a credit rating usually higher than 580, with a down payment of 3.5% of the home price, and financial stability and savings to pay the monthly PITI (Principal mortgage, Interest, Taxes, Insurance).
If you are a future home buyer that has a higher amount of money saved up and a higher credit rating you could usually get a conventional loan. The con with conventional loans is that they could have higher interest rates than FHA loans, but they have lower requirements on the property itself. Also, if you have at least 22% of the home’s selling price for a down payment you can get a conventional loan with private mortgage insurance (PMI) which takes a huge chunk out of your monthly payment.
There are many ways to finance a home purchase, and many things that are to be considered when determining if you are ready to buy a home or not. Take this quick quiz below and see if you are ready to buy a home!
