The economy has rebounded from its collapse several years ago, and more homes in North Texas are selling than ever before. Perhaps many of your friends have jumped on the house buying wagon, and you think you’re ready – but are you really? Buying a house is a big decision and an even bigger financial investment. If you think you’re ready to buy a Flower Mound home, take a quick look at these warning signs that may suggest otherwise!
Your income doesn’t support your decision. Have you really taken a close look at your financial situation, and considered all of the costs? Down payment, closing costs, homeowner’s insurance, taxes – and enough to keep it all going months down the road in addition to having an emergency fund. There’s more to it than the monthly mortgage, so be sure you crunch the numbers.
You have substantial debt. If your credit cards are maxed out, you have a car payment, medical bills, and other payments, or you have a tendency to spend on frivolous items, you may not be prepared for home ownership. Even if you earn enough to easily make the monthly payments, keep in mind that lenders generally want to keep the client’s debt load at an amount less than 36% of their gross income – and this number includes the mortgage payment you would have if you purchased the home.
You’re working a relatively new job. Have you been working for the same employer for two years or longer? If not, mortgage lenders may not think you’ve been on the job long enough to qualify for a loan. Long-term employment shows stability; however, frequently changing jobs can indicate you’re a bit insecure when it comes to work. Lenders can get nervous when they’re uncertain whether you can meet your future financial obligations.
Credit – no credit, bad credit. Bad credit is not a good thing if you’re looking to buy a home, but no credit can be just as problematic. When you have bad credit, it indicates that you’ve failed to pay bills in the past, have too much debt for your income level, or have filed bankruptcy. However, having no credit at all (or very little) is also not good, simply because mortgage lenders have no data or history on which to base your ability to pay your mortgage each month. What you want to establish is a year-long period of paying your rent, utilities, cell phone bill, satellite or cable, car insurance, etc. on time.
Are you really ready to purchase a home in North Texas? While it’s the dream of many to buy their ideal home, it’s important to have no doubt that you’re ready and capable of taking on the financial responsibility – and that lenders can see they won’t have anything to be concerned about. At Team Nelson, our Flower Mound real estate agents are dedicated to not only helping you find your dream home, but making sure your dream won’t turn into a nightmare. Contact us today!