If you’re in your 20’s one of the very best things you can do is buy a home and in this article, we will provide you with practical steps you can use to get started on the path to homeownership.
When buying a home the first thing you should do is save money for a down payment on a house. Right now it’s ideal for every home buyer to save at least 20% for a down payment but the great thing is that if you can’t afford to save 20% it’s still possible for you to buy your first home with a HUD or FHA mortgage loan since these mortgage loans only require a down payment of 3.5%.
Can’t save money for a down payment on a home? No problem. Many states, including California, offer down payment assistance programs that you can apply for. These programs typically include certain requirements like home buyer education courses that you will have to take but they can also put you in the position of being able to buy your first home.
Remember that even if you qualify for a down payment assistance program it’s still a good idea to buy a home with at least some type of down payment because every home buyer should attempt to buy their first home with at least some skin in the game.
Step #2 – Review Your Credit Score
Before going through the process of obtaining a mortgage loan you should also check your credit score because it’s recommended that home buyers have credit scores that are at least 700 or better. If your score is “less than perfect” you still may qualify for a mortgage loan if you have a credit score that’s as low as 580 thanks to HUD and FHA loans.
Step #3 – Get Your Finances in Order
The next step on this list is for you to get your finances in order and to do this you will need to do the following:
- Organize documents – You will need to have your bank statements, W2’s and income tax forms ready.
- Confirm your debt-to-income ratio – Did you know that your DTI should be no more than 43%? To figure out what your debt-to-income ratio is simply divided your total debts by monthly income. If your DTI is higher than 43% you should pay down some debts before applying for a mortgage loan.
Step #4 – Meet With a Mortgage Lender
Research mortgage lenders in your area, then schedule an appointment to get started with the process of getting pre-approved for a mortgage loan.
Step #5 – Hire an Experienced Realtor®
Last of all, but most important, research Real Estate Agents online and hire the most experienced Realtor® to help you search for homes that match your budget and search criteria.
To learn more about how to get ready for buying a home in your 20’s contact Fred Sed Realty today by calling us at (800) 921-9231 or click here to connect with us online.