(You CAN have debt when purchasing a house, but if your debt/income ratio isn’t favorable, qualifying for a loan is difficult.)
What Habits Help Us Californians Save in this Day and Age?
1. Cutting Down Consumer Spending: Think about what you purchase every day. Do you really need everything you buy to actually get by?
2. Budgeting: A great budgeting app for your smartphone is called “Every Dollar,” created by Dave Ramsey. Matt & I use it every day – and it definitely helps us stick to our budgeting goals! Try it out!
A few Basic Reminders About Qualifying for a Home Loan!
1. CONSISTENT INCOME. In order to qualify for a loan, the lender has to prove that you can afford the mortgage payment every month. They ask for your income salary and, if you own your own business, they take your average income of the past few years.
2. STRONG CREDIT. You also want to have the best credit score you possibly can – so pay off those credit cards and loans!
3. Can’t afford the loan by yourself? It’s great to have a partner! Having a partner bumps up your total qualifying income, because they combine your incomes together. What if you don’t have a go-to partner? That’s okay – it is still possible! Other partners, like a family member, could co-sign on the loan in order to help you qualify for the house you want!
4. First time home buyers: if you are a Veteran, you can qualify with 0% down. If it is a FHA loan you take out, you can qualify with 3% down. There are other types of loans (Freddie Mac, Fannie Mae, etc.) that you can educate yourself on – but there is one rule that will never change: the more money you can put down, the more competitive your offer is!
A Few More Books that Helped Us with a Goal-Oriented Mindset and Positive Spirit:
- Miracle Morning