Are you thinking of buying your first home?
While the process is long and can be frustrating, the reward is well worth the wait. Owning your own home is beneficial for many reasons, including building equity, saving money on rising rent prices, and a few, helpful tax advantages. However, like any successful endeavor, purchasing a home is all about being prepared and getting the details right.
If you are a first-time home buyer and want to be properly prepared for the process, here is a list of what is required to buy a house.
Qualifying Credit Score
When you are buying your first home, you need a qualifying credit score. Your credit score and history helps lenders decide if you are going to be a credit risk. If your score is on the low side, you may want to work on improving your credit score and creditworthiness before starting the home-buying process.
Savings
There are several costs associated with buying a home. You have to pay a down payment on a house and closing costs. You also need to have reserves, a certain amount of money in your bank account to show you have not depleted your account and can pay upcoming mortgage payments.
Stable Employment
For first-time house buyers, you need to have stable employment. Lenders want to know that you are well-established, and having a job for at least 2 years helps establish your stability. If you are a business owner, expect to provide 1-2 years of your tax returns.
Solid Income
While having a job is great, you also need solid income. If you’ve been employed for years but make the minimum wage, you are not likely to qualify for a home loan. Check with potential lenders to find out the amount you need to earn to qualify for a home loan.
Pre-Approval Letter
One of the best house buying tips is to get a pre-approval letter as soon as you can. A pre-approval letter is an offer from a lender to loan you a specific amount. This is essential because it shows you are a serious buyer.
You also need this document because most real estate professionals will not work with you without a pre-approval letter.
Real Estate Professional
While you can DIY the process, you will have a better experience if you hire a real estate professional. A real estate agent or realtor can help find the perfect home for you and your family. Hiring a professional will save you time, money, and headaches.
This Is What Is Required to Buy a House
If you have been wondering what is required to buy a house, this guide is for you.
You need to have a good credit score, savings to pay all of the associated costs, and stable employment with a solid income. You also need financial documentation and a pre-approval letter. While you can DIY the process, it’s recommended to hire a real estate professional to ensure the process goes as smoothly as possible.
If you have all of these components, you are ready to purchase your first home.
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