Buying a home is one of the biggest accomplishments an individual or couple can experience in their lifetime. They've worked hard for years, have saved, have scrimped, have built their credit score and now they have the opportunity to purchase their first home. There's plenty that needs to be taken care of, which is why the process can last months. Here are some common obstacles that first-time homebuyers can run into in Florida.
One of the biggest obstacles faced by first-time homebuyers is that their debt-to-income ratio is way too high. Lenders prefer that this ratio hovers around 40 to 45 percent. Any higher than this and you might find yourself waiting another year or two before signing on the dotted line for a new home.
If you are using money gifted to you for the down payment, this could present an obstacle when buying a home for the first time. Why? You might have trouble providing the required documents to show you have this money in your possession to use.
Another obstacle to buying your first home is if you are self-employed. Most lenders like to see three years' worth of tax returns for a self-employed person looking to buy a home. So, if you are trying to buy a home early in your self-employment career, you might run into some issues.
If you have poor credit history, this can be a big obstacle when trying to buy your first home. You might need to work on repairing your credit history before applying for a mortgage.
Are you looking to buy your first home in Florida? The market fluctuates and there's plenty that can go wrong, including the obstacles named in this post. Be prepared for various outcomes when looking for a new home, as the process can be very stressful.
Source: Mortgage Calculator, "Major Obstacles For First-Time Homebuyers," accessed March 27, 2018