Who qualifies for a first time home buyer mortgage?admin
Buying a home? There are benefits to being a first time home buyer! Do you qualify? Find out below!
A first time home buyer is someone who has never owned a home before! But the rules also include this little twist! If you haven’t owned a home for at least three years prior to applying for the mortgage loan, even you could be called a first time home buyer! And you could be eligible for all the benefits and grants which come with the title!
Being approved for a first time home buyer mortgage requires you to fill up some criteria! These can be related to income and credit. They are usually set to ensure your eligibility and to find out whether you can pay off your mortgage without any sort of hassle at the appropriate time! They are defined by the government.
What should you have to qualify for a first time home buyer mortgage?
- You should be a first time home buyer by definition
- A stable and secure income
- Documents which prove you can afford the mortgage
- You should have a good amount in savings for down payment
- A good credit history
- A good debt to service ratio
The lenders are taking a risk by giving you the amount for your home purchase. You need to be able to prove that you have a stable income which you will use to pay off your mortgage on a timely basis. If this is your first big loan, you pose a lesser risk and hence will be able to get lower rates as well!
The income documents, tax statements and other income related documents should be presented to the lender. Keep them up to date as your current situation will help them determine what amount of mortgage you are eligible for!
With any mortgage plan, you will need to pay a down payment. This down payment could be as much as twenty percentage of the entire mortgage amount. You will need to prove that you have that much in your savings or you will need to opt for a mortgage insurance plan!
Credit history is a report of how you have handled finances in the past. This is a document which the lender will use as a foundation to determine whether you are a trustworthy borrower. Make sure that this is error free and up to date. If you do not have a good credit history, you can ask your broker to find plans accordingly!
Debt to service ratio is important as well. This means the relation of your income to the amount of debt you have already taken. Your income should always be higher. You should definitely ask your broker about grants and other government plans which can help you get the right amount of mortgage!