Barriers to Home Ownership - Loan Issues

Barriers To Home Ownership  - Loan Issues

Barriers to home ownership

Once you have decided to buy a Louisville Home - you have reached the first step.  We get asked the question a lot about what can keep me from getting a home.  The loan process is the major sticking point we have found.  If you have decided to turn your internet clicking into an actually search here are four items that can cause an issue in the loan:

1. Lack of or Bad Credit

The number one area of concern is always bad credit. A late bill from 5 years ago may not have seemed like a big deal at the time- but it is now an issue.  Maybe you were slowing paying your credit card bill and now that come up.  Bad credit can be improved with time- the trick is to find out now that you have an issue by calling a lender and getting to work.    

Strangely enough - lack of credit can also be an issue.  Debt free is the way to live unless you want to buy a house- then the frugalness can hurt you.  Keep in mind that lack of credit can also be addressed with a lender- they may be able to help you get a credit history.

 

2. Low or no Down payment

While still available under limited circumstances- there are no longer many options for loans that do not require a down payment. Most lenders will want at least a 3.5% down payment for an FHA loan and maybe as much at 10% for a conventional loan. While this may seem daunting you may receive a gift from a family member to help out.  Also start saving now for the future - that cup of Starbucks may be keeping you from your new home.

 

3. Too Much Credit

OK so you have some credit cards and a car loan and a store charge card- you needed credit correct? Well know issue number three is too much credit.  That's correct you can have too much credit.  If you debt-to-income ratio is too high (meaning you have too many bills for your income).  DO NOT start just paying off bills- talk to a professional lender and they can help.  There may be one bill to pay off that is better than another- so talk to a lender.

 

4. I need a Job?

Your lender will look into your employment history and may require as much as two years in your current job - this may change based on career and other factors but you really need a stable job history for a loan. Stop job jumping- it may hurt your buying power.  

 

Keep in mind that you probably will qualify for a loan without any of these issues and best yet these can all be overcome with help and time.  Feel free to give us a call and we can recommend a lender that can help.  Start here with your Louisville Homes Search

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