Thank you for taking the Are You Ready to Buy a Home? Quiz! This is a self-education tool to check your home loan purchase preparedness and get some tips before applying for a home loan.
Based on your answer(s), you may want to consider the following before applying for a home loan:
If you answered NO to having a 620 or higher credit score:
Most home loans require a 620 minimum credit score to qualify, though FHA loans require a minimum of 580. Before you apply for a home loan, you may want to consider improving your credit score. You can start by visiting this credit repair blog for some helpful starter tips.
If you answered NO to having a 2-year employment history with no gaps:
Typically, lenders approve borrowers who have 2 years of consistent employment history. This shows lenders that borrowers have a consistent history of income, which means a borrower will likely be able to pay back their loan without falling behind on payments.
If you answered YES to starting to work for a new company within the last 6 months:
Typically, lenders look to approve borrowers who have been at the same company for at least 6 months. There are risks involved with switching jobs and industries, and lenders want to ensure that the borrowers they approve will be able to pay back their loan without falling behind on payments. You may want to consider waiting to apply for a home loan until you (or your co-borrower, if you have one) have been at your company for at least six months.
If you answered NO to being eligible for VA benefits:
Based on your answer, you might not qualify for a VA loan, which could require no down payment. If you are unsure of your VA eligibility, visit the Veterans Benefits Administration page to learn more.
If you answered NO to having money saved to cover a down payment and other mortgage costs:
Most loans require a down payment, closing costs, and lending fees to be paid upfront at the loan closing appointment. Some loans allow you to negotiate to have sellers pay some of these costs, and there may be state and local down payment assistance programs you can apply for. You may also receive a set gift amount from a family member or friend. That being said, you may still want to consider saving more before you apply for a home loan.