Making a successful home purchase starts with preparation, and here’s what you can expect from the financial side of things.
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For the first installment of our three-part series about how to make a successful home purchase in 2019, we’ll talk about how you need to prepare for this purchase. Specifically, we’ll discuss the financial side of this preparation.
For about 90% of all home purchases, the buyer uses a mortgage loan, and the three pillars of the loan process are known as a buyer’s “CIA”: their credit, income, and assets.
When a loan officer examines your credit, they’re determining whether or not they trust you to pay back the loan. Your credit score can also impact the interest rate you receive for your loan (or whether or not you’re approved for the loan at all). When it comes to your income, they’ll want to know your monthly debt-to-income ratio (DTI) and use that percentage to approve you for your loan. Lastly, your assets include the cash you have available for a down payment and the transaction’s closing costs.
Starting the loan process early is key, because a good loan officer is instrumental in setting you up for a successful purchase. If you have credit issues, it may take many months to resolve them. As far as income goes, you may want to report it differently for the upcoming tax season. You also might need to use your assets to pay off some of your debt so you have a better DTI.
So, whether you’re looking to buy a home or build wealth through real estate investment in 2019, call a loan officer or financial advisor today. We know plenty of local experts we’d love to put you in touch with.
Be sure to stay tuned for the next episode of this series, where we’ll talk more about how to make a successful home purchase. In the meantime, if you have any other questions or real estate needs, don’t hesitate to reach out to me. I’d be happy to help you.