iowahomeloans

How to Shape Up Your Financial Fitness to Qualify for a Mortgage

Posted on: February 6, 2014

Not everyone is financially ready to buy a home, but becoming financially ready doesn’t just happen. You may have to make changes to your lifestyle or take certain steps to improve your financial situation in order to qualify for a home loan. The key is to understand that you can shape up your financial circumstances – all you have to do is educate yourself about the options and determine which best fit your circumstances. The three basic options are to save more money, to increase your income or to seek outside help with your downpayment and up-front cash.

Saving Money and Increasing Income

The most obvious elements of increasing your financial fitness are saving money and increasing your income. Most people have some areas of their finances where they could cut back in order to save more money. Is your car payment high? Do you spent a lot of money on eating out or convenience foods? Buy designer clothes? Use credit cards too much? Cutting back or eliminating key areas of financial expense can drastically boost your saving capabilities.

To increase your income, on the other hand, try negotiating a raise, looking for a promotion within your company or even switching to a new job. Work overtime. Work a second job. Or even buy with a friend. You can find or create plenty of opportunities to increase your income.

Grants, Gifts and Government Programs

If you’re still unable to shape your finances up enough to buy a home, try looking into grants, gifts and government programs. Some government programs exist solely to help first-time homebuyers buy a home, and will give or loan you a part of the downpayment. You may also find local organizations that want to help homeowners, or even loan programs designed for first-time homeowners. Finally, gifts from friends or family, or again, government programs, can help you make up the difference in your home loan. Research what you may be eligible for and you may find that you can afford to buy a home after all.

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