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To find the right mortgage, it’s helpful to know your monthly income, how much you spend each month, and the amount you can set aside for a house. We explore these details below to help you understand what kind of mortgage you could comfortably manage.
The first step to homeownership. See how the experts do it.
A lender looks at three main things – your credit score, your monthly income and debts, and what kind of savings you have for a down payment. We explore each in more depth below.
Each lender and loan type has a different credit score requirement. VA loans are typically the most lenient as the Veterans Administration who backs the loans technically does not have a minimum score, but the lenders the VA works through to offer the loans typically do.
Lenders offering VA and FHA loans typically have options down to 580 and Conventional loans require at least a 620.
But remember, if your credit score is on the lower end, lenders will look more closely at your other financial details and this will likely lead to qualifying you at a lower amount, higher interest rate and payment options, and possibly requiring a larger down payment. This is why a 640 to 680 score is more commonly associated with what you need to buy a home.
Your income needs to be enough to cover your mortgage and other debts comfortably. Lenders generally allow your mortgage payment and all your other debts (car payments, student loans, credit cards, etc) to add up to around half of your monthly pre-tax income.
Many people are surprised to find most home loans only require around 3% of home price to come from them (known as down payment). Often, there are assistance programs that can help with the 3% too, so exploring your options before you have a large amount saved can be beneficial in planning your homeownership journey.
Check out our online calculators that will help you figure out what you can afford. This is a great place to see the numbers in action.
Talk to a mortgage pro. A lender’s number one job is to help you get prequalified, and most importantly, make you comfortable with the process and details, so don’t feel bad asking them for help – it’s their job!
Here at Spire people are available now to talk.
Questions big or small, we’d love to chat with you!
The first step is to fill out a loan application and talk to a lender. The lender can then pull your credit to see everything needed to guide you to the right loan program for you. Our pros are experts at finding the perfect fit for your financial needs and helping with a roadmap to home ownership today.
FHA loans are a wonderful product for someone buying a primary residence. Most people will need at least a 580 credit score, a steady income that can support the house payment and other monthly debts, as well as 3.5% down payment. Some people may qualify for down payment assistance that can help with the 3.5% down payment and other closing costs.
There are several eligibility guidelines. First, you must have served 90 consecutive days of active service during the war. Alternatively, you must have served 181 days of active service during peacetime. Having served six years of service in the national guard’s reserve is a valid option too. Further, spouses of service members who died in the line of duty qualify for this loan. VA loans don’t require a down payment and require the person to have enough income to support the house payment, other monthly debts, and still have a residual income remaining. The amount of residual income needed for qualification is based on VA’s residual income chart that is broken down by region.
If you meet the minimum service requirements for a VA home loan then getting qualified for a VA home loan is a breeze. We can help you with what documents you need to provide along with a loan application that will allow us to determine how much house you can afford and what your payment will be.
Type us your question and we’ll answer your specific scenario! We’re really good at this and respond fast!
