Are you interested in making a dream come true? More specifically, are you interested in owning your own home? Well here are some tips to make achieving this dream a reality. Consider your debt and income ratio. This will let you evaluate what you can and cannot afford when looking for a place of your own. Make sure to note monthly expenses as well as overall yearly expenses.
After figuring out what you can afford, now it is time to consider a new home loan. FHA can offer loans to those looking to buy their first home without problem. They allow individuals to qualify who may have been denied earlier on, for a home loan by conventional underwriting guidelines. FHA loans are great for newlyweds, recent college graduates, or those still trying to complete their education. Also, those who have had bad credit in the past, been plagued by bankruptcy, and those who have dealt with foreclosure, this loan makes it possible for you to obtain a new home like everyone else.
A loan that works well for first time buyers is the fixed-rate loan. It allows individuals to finance up to 97 percent of their home loan. This allows payments to be kept down and closing costs are kept at a minimum. The insurance on FHA mortgages are rolled into the total monthly payment at .5 percent of the total loan amount. Also, after five years or when the loan balance reaches 78 percent, the additional payments drop off the monthly payment, making it even cheaper.
If you are wondering how you can obtain an FHA loan do not worry. There is no minimum income requirement to qualify but debt ratios are evaluated to help prevent you from borrowing more than you can truly afford. They will closely analyze income and monthly statements but they understand that you are buying your first home and walk you through what you need to do.