3 Months or 2 years is really up to you in most cases but...
Sometimes it will be determiend by these factors below.
Before we go over the factors, when will be best for you personally? Here's how to know if you are personally ready to buy.
Factors of Readiness
Tip 1. Get Your Tax Documents In Sexy Shape
Do you have your income documents ready?
One of the most frequent issues is that some people have not filed their taxes or have not reported all of their income. In my circle, a lot of us have small businesses, do freelance work, or have online businesses. As a result, it's up to us how much of that income we actually report.
I have had seeral conversations with folks who either did not report all of their income OR they reported so many expenses and deductions that it looked like their business lost money or did not make much at all.
We are not billionaires who can under-report our income and still get financing from a bank. You need to report a decent income and accept that part of Financial Growth REQUIRES that you show with evidence that you have successfully managed your income and business.
Right now we are approaching 2021, so everyone who wants to buy in 2021, let's get your taxes prepared and/or updated if needed for 2020 and 2019.
Tip 2. Get a Slim Fine Budget
What's your debt to income ration looking like?
A lot of people have heard this term but are not sure what it really means. Basically, it's the difference between your monthly income and your monthly expenses. So if last year you reported $36000 in income, you earned $3000 a month. If you're monthly expenses, (not including rent on your living space) is $!500 you're debt to income ratio is 1 to 2 or in other words 50% of your monthly ijncome goes to your expenses.
The bank will decide how much they can lend to you based on what your mortgage would be. For instance, at current interest rates, your mortgage for a $200K home would be approximiately $1100 a month (this amount includes your taxes and insurances)
The bank has to decide if you can SAFELY afford an $1100 a month mortgage with your remaining $1500 a month.
Every bank has different requiprements and options, so when you and I speak, we'll review what's currently available and with whom so you can make the best choice.
Ask yourself this: Is your budget as good as it can get?
What changes can you make? In 2013, I made some major changes that paid off immensely. Remember this adage: Sacrifice in the short term so you can have affluence in the long term.
Tip 3. Let's Get Your Credit Score Stacked Up
What's your credit score?
Credit requirements for mortgages change all the time. Before Covid19, FHA could approve you with a 590 in most cases, Conventional mortgages around a 620 and investors usually needed a 640 or higher. Just like most things, Covid made some changes.
Now almost every type of mortgage requires a 640 or higher. Seem impossible to anyone out there struggling to stay at a 600?
I get it. But here's what you need to know: CREDIT IS NOT AS SCARY AS YOU THINK.
Here's some Credit 101 knowledge: Anyone can get 100 points higher in 3 to 9 months. DO NOT PAY SOMEONE to do this for you. It's simple. I fyou want to know how, just email me and I'll send over the FREE Process: firstname.lastname@example.org
Tip 4. How much will you actually need out-of-pocket?
This will vary by your state and even parish (county).
Why? Because most jurisdictions have different programs available and these change each year in some cases.
As I am writihng, most Louisiana parishes have soft second funds available to assist with downpayment and closing costs. The state's bond program was offline due to Covid19, but has since been reopened. Also, in any city or town with less than 30K people, you can purchase with a rural development mortgage that has ZERO downpayment required.
So what's the numbers?
The range is from $1500 to approximately 5 or 8% of the sales price. This is where a great real estate agent becomes important. I stay updated on what's available and I can advise on which banks are the best for your current situation and goals.
Text or Email and let's start the conversation. We'll map it out and see what your best timeline looks like:
Jessica Bordelon, Agent,