![]() No credit score is not the same thing as a low credit score. Yes! If you don’t have a credit score, that doesn’t disqualify you from getting a mortgage. But if you follow our way of thinking, you won’t even need to worry about this.Ĭan you buy a house without a credit score? If you plan on using your credit score to get a mortgage, it should be between 620 and 850. That’s about as dumb as giving a pilot’s license to someone with multiple DUIs! And since lenders haven’t come up with another way of doing this, they’ll check your credit score. Lenders don’t want to give a huge loan to someone who has a reputation for not repaying debt. Look at your budget and make sure you can take on all these costs without dipping into your emergency fund. On top of monthly mortgage payments, you’ll have plenty of other expenses: lawn care, home repairs and maintenance, homeowner’s insurance, property taxes, homeowners association fees, and whatever furniture and decor you buy for your new home. Can you afford the extra costs of homeownership? That will give you plenty of room in your budget to pay other bills, save for your kids’ college, and invest for your retirement.ĭon’t let the bank decide how much mortgage you can afford. Our recommendation is to take out a mortgage with a monthly payment that’s no more than 25% of your monthly take-home pay. You can do that right now with our mortgage calculator. If you know you’re ready to buy a home, awesome! You’re in a good place to consider a mortgage, so ask yourself these two questions before moving on.ĭon’t let the bank decide how much mortgage you can afford. It’s okay to rent for a while, focus on paying off your debt, and think about your mortgage options later. But if you have car loans, student loans or credit card debt, the last thing you want to do is take on owning and paying for a home. (20% is even better and will help you avoid having private mortgage insurance added to your payments.)įor many people, this is the hardest hurdle to jump. You should be out of debt with an emergency fund of 3–6 months of expenses, and you should have at least a 10% down payment saved. Get Pre-Approved-or Better, Get Certifiedīefore you step foot in a lender’s office, look at your finances and make sure you’re ready to buy a home.But if you’re as careful about which mortgage to choose as you are which home to buy, you can enjoy the excitement and dignity of homeownership. The fact is, there’s no shortage of mortgage loan options out there, and most of them take you down a road you don’t want to go down. Otherwise, you could find yourself in a serious financial mess, having to say goodbye to all your financial hopes and dreams-or goodbye to your house in foreclosure. It’s up to you to choose a home and a mortgage that puts you on the path to debt-free homeownership. If you’re not paying cash for one of the biggest purchases of your life-a house-then step into Mortgage Class 101!īut be warned: Getting a mortgage is work.
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