The homebuying journey can be challenging and sometimes unpredictable, but one thing is certain – the homebuying process is different for everyone.
With that said, there are certain factors that can affect anyone’s homebuying process.
- Credit score & debt
A low credit score can lead to higher mortgage rates and sometimes a rejected mortgage application. Extensive debt collections, charge offs and your debt-to-income ratio can determine your mortgage-readiness.
If you’re looking to improve your credit score, our Credit Advising service is available to help you repair your credit score and create an action plan to reach financial goals.
To learn more about our credit advising service, watch this video: https://www.youtube.com/watch?v=Ja2gJsdcFUw&t=2s
If you co-sign for someone’s car loan or an unsecured loan with the bank, then that still counts into your debt-to-income ratio even though you’re not the one making those payments. So extra thought needs to be put into co-signing especially if you’re looking to buy a home in the future.
- Not having credit
While having poor credit can certainly cause delays in the homebuying process, having a light credit report or not having any credit at all can affect eligibility for home loans. At the HomeOwnership Center, we do have loan products that will help you if you don’t have credit, however, some lenders may turn you away.
- Overdrawn bank accounts
Overdrawn bank accounts can be a red flag for a lender as it indicates that you’re unable to manage your monthly budget.
More details on what can affect the process and more can be found in this YouTube video:
Be sure to keep up-to-date with our YouTube channel for information on our loan products, services and more!