Deciding to buy a home is a fun and exciting experience, but it should not be taken lightly. Often times, a young couple thinks that having a solid down payment and expenses to cover their closing costs is all they need, when in reality, you need to be prepared for the full responsibility of home ownership. Here are a couple things to keep in mind before you decide to buy:

Work History – Your work history is extremely important when purchasing a home. Your lender will want to see a steady employment history, since your income greatly depends on how steady your job is. If you’ve had any major gaps in your employment or if you’ve switched fields, your lender may not be willing to take a chance with lending you their money. Most lenders will look at your last two years of employment, they will want to see a steady income, meaning commission jobs and contracting work may also present problems. Not only will your lender want sufficient proof of employment, but now is the time to evaluate your finances as well. Is there any way you could lose your current job? Do you have enough connections in the city that you’re buying to quickly find a new job? Or, more importantly, do you have enough in savings to pay your mortgage for a few months if you need to find a new job?

Credit History – Many young people don’t understand the importance of a clean credit score, and are quick to make mistakes. Just missing a payment simply because you forgot can put you behind. To secure a loan, you’re going to have to have a decent credit score, which means you may want to clean up any recent issues you may have. You may run into issues if you’ve had trouble paying your rent on-time, had a foreclosure on a previous home or had any property repossessed.

How Much House Can You Afford? – Just like a lender won’t want you to overpay for a home, they also won’t over lend to a borrower. There are actually legal limits on how much money they can lend you, and your lender will look at how much you currently make and spend each month. They will look at the total amount you currently pay for rent or your mortgage and will factor in taxes, insurance premiums and HOA fees, if necessary. While it may be discouraging to be told you can’t afford what you want, a lender is looking out for your best interests as well. Your Baker real estate agent should be able to give you a rough estimate, but it’s always best to get pre-qualified before starting your search.

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