Becoming a home owner is more than a personal goal. According to 70% of millennials surveyed, home ownership is still a part of the American dream. It’s as important today as it was 50 years ago, and rightfully so. Owning a home is a huge investment into your future. But what if you don’t qualify for a home loan?
It’s true that not everyone will qualify when first applying for a home loan. In fact, 30% of Americans won’t qualify when they begin their home search. It may seem like an impossible road block; however, not qualifying is simply a small detour.
Establishing what the issue is is the first step toward qualifying for a loan. As your lender, we at Blackstone Financial can explain to you why you don’t qualify. More importantly, we can walk you through various solutions and get you back on track towards owning your dream home.
There are several ways of fixing whatever problem you may face. We’ve compiled some of the more common problems applicants face,below. As always, feel free to give us a call to discuss your specific situation. We offer one-on-one assistance for every client.
Problem: I have too low a credit score
This issue arises more often than you might think. Credit scores can be tough to raise, but with enough patience and management, it can be done. Try taking one of these steps to help bring up your credit score:
• Pay all of your bills on time. Late payments are the worst for your credit and can drop your score by up to 50 points.
• Be sure to call creditors if you’re going to be late with a payment. There’s usually a grace period and they may work with you to avoid reporting.
• Use a secured credit card to build credit.
• Dispute wrong information found on your credit report.
Problem: My debt-to-income ratio is too high
Unfortunately, many Americans are in the predicament of having too much debt and not enough income. Definitely, you’ll want to avoid running out to purchase a new car if you’re expecting to be home shopping any time soon (see “Things To Avoid Before Buying A Home”). Begin reducing your debt-to-income ratio by making small changes. Make more than the minimum required monthly payments on car payments and credit cards for quicker pay-off. Monitor your DIR percentage monthly to see how you’re progressing.
Problem: I don’t have money for a down payment
You may be in luck. There are programs that offer down-payment assistance and a good Mortgage Banker will research every possible program you may benefit from. However, some loans will require a down-payment of anywhere from 3% to 20% the purchase price. If you don’t qualify now because of limited funds, try making lifestyle changes to save up the cash. Eat out less. Limit the amount of Starbucks visits to once per week. Small changes can amount to big savings. If you feel comfortable, you can also ask for gift funds from a family member.
Remember, the answer is never “no” in home loans, it’s just “not yet”. By contacting us, we can review your financial situation and help you take measures towards realizing your real estate dreams.