Remember, this process may take up to two years, but with determination and preparation, you can turn that dream into your new home in no time! Start your exciting journey towards homeownership today!

2 years of tax return

Having two years' worth of tax returns ready is crucial. This demonstrates to the bank that you have a steady income and the capacity to secure a loan. Your declared annual income will directly influence the amount of money the bank is willing to lend.

Understanding, Monitoring, and Improving Your Credit

Your credit score is a critical indicator to banks of your debt responsibility. Banks typically lend from a score of 620, but ideally, it should be above 720 to secure a larger amount and better interest rate. There are three major credit bureaus: Experian, Equifax, and TransUnion, which you can monitor through some free apps like Credit Karma and Experian.

It is recommended to regularly check and manage your credit score to ensure financial stability and favorable lending terms.

Reduce Your Debts

It's crucial to reduce any debts you may have, as the bank uses the Debt-to-Income(DTI) ratio to determine how much they will lend you. The DTI is the ratio of your monthly debts to your monthly income. It is expressed as a percentage, and it is recommended that it does not exceed 36%. The lower your DTI, the higher the chances of your application being approved and the loan amount being larger. If you want to calculate your DTI, Click Here.

Savings for Down Payment and Closing Costs

The down payment amount can vary between 3.5% and 20%, depending on your financial situation and prevailing market conditions. Closing costs may also vary, but typically represent around 5% of the total property cost. These costs comprehend expenses incurred during the transfer of property ownership from the seller to the buyer.

Choosing a Real Estate Agent

This professional will meticulously assess your circumstances, provide information on relevant government assistance programs applicable to your loan, and ensure your eligibility for obtaining the loan. Additionally they will diligently search for a home that aligns with your preferences and budget.