I spent my 20s mismanaging my money, and came to regret all of those impulse purchases placed on credit cards when my credit score plummeted due to missing a few payments. I didn't learn how much this would affect my life until I was denied for both an auto loan and mortgage in the same year due to my bad credit score. I spent the next few years cleaning up my credit report and putting every extra penny I had toward old debts. Having to put my impulse spending on halt was difficult at first, but it was a great learning experience and I now realize how rewarding saving and investing money really can be. I have put a lot of research into good money management techniques, so I decided to start a blog to share what I have learned with anyone who needs help!
Buying a home is likely one of the biggest financial decisions you will make. Even if it's not your first time purchasing a property, buying a home is not something to take lightly. While it's easy to get lost in the details of finding the right home for your needs, it's important to carefully consider your financing options before making a decision. There's more to consider than your budget. Here's what you need to know if you are planning on taking out a mortgage.
Your Options
The first thing that you need to consider when it comes to home loans is that there are a variety of options to choose from. Conventional home loans are a popular option and a great option if you have strong credit. For those with less than stellar credit or first time home buyers, FHA mortgages are often a good option. VA loans and USDA loans are great options for those who are in the military and for those who live in rural locations. When looking at mortgages, you also have the option between fixed-rate and adjustable-rate mortgages.
Your Credit
If you are considering home ownership, your previous financial history will have a major impact on whether or not you qualify for a home loan or not. For a conventional loan you will typically need a credit score of at least 620. For an FHA loan you will need a score of at least 580, though it is possible to get this type of loan with a lower score it is unlikely. VA loans typically require credit scores of at least 620 while you will need a score of 640 to qualify for a USDA loan. In some cases coming to the table with a larger down payment may help increase your chances of approval if you don't have a great credit score.
How Long it Takes
When it comes to buying a home, timing is key. Knowing how long the loan approval process takes can be helpful. On average, the time period between applying for a loan and closing on a home is right at 43 days. It's important to keep this in mind when you are in the middle of buying a home. You will want to make sure that you start the financing process as soon as possible, especially if you want to move in to your new home within a certain amount of time.
If you are taking out a mortgage, there are a few things to keep in mind. First you have a variety of lenders and loan types to choose from. When it comes to getting a home loan, your previous financial history will play a large role in whether or not you are approved for a loan. The entire process can take upwards of a month from application to closing.
Share15 July 2019
