Buying a home just offers more benefits compared to renting. Generally, people will get a loan to be able to buy the house they want. However, before you can even make a loan, you have to be aware of your credit score and your debt-to-income ratio, which are based on the monthly income percentage spent on paying your monthly debts. These include mortgages, credit card payments, child support and any other loans you may have.
VA (Veterans Affairs) Loan
This loan program is good for most military servicemen and veterans. Reservists, national guard members, and spouses of military members who have died while on active duty or as a result of service-related disability are also qualified to apply. The loan is fully financed by the Veteran Affairs, however, there are limits to the amount and may even vary from state to state.
FHA (Federal Housing Administration) Loans
The Federal Housing Administration loan is another mortgage program by the government that allows people with low credit scores and high debt-to-income ratio to avail of a home loan. The minimum down payment for FHA borrowers is 3.5% and credit scores of 580 or even lower can benefit from this. Here, they allow about 56 or 57% of the monthly income to be spent by the borrower on his or her monthly debts, which can include mortgages and any other loans the person may have.
Conventional Home Loan
Conventional loans are great for people with good to high credit scores. Still, a prospective borrower will need to meet specific guidelines such as an excellent credit score as well as the ability to give a minimum down payment. Your debt-to-income ratio will also be considered.
If you are thinking of buying a house, make sure to talk a lender you trust. They can talk you through the most suitable home loan for you and will provide you the necessary information you need about the process.