Signs You’re Ready to Own a Home

The VA home loan is out there, ready for you to take advantage of all it has to offer. But there’s only one problem: you aren’t sure if you’re ready to own a home. If you’re worried you may not be able to afford it, or have a high enough credit score, the idea of owning a home can be discouraging. But you’re probably closer than you think! Here are 4 signs you’re ready to own a home.

Signs You’re Ready to Own a Home

Credit Score

Your credit score is one the most telling signs you’re ready to own a home. Most young adults who have not opened a line of credit recently, don’t know their current credit score. If it was lower a few years back when you opened your auto loan, you have likely increased your score since then. Mortgage lenders typically look for a score in the range of 620 or higher to be approved for a VA loan. There are a few online programs out there that give you a ballpark estimate of your score, but if you feel like you’re serious about obtaining a VA loan, talk with your lender to get an official credit check. You might be higher than you think and that much closer to owning a home!

You Make More Than You Pay

Debt to income ratio is a big part of what lenders look at when assessing you for a mortgage. The debt to income ratio compares your monthly expenses to the amount of money you make. VA guidelines suggest a DTI of 41% or less but that number can be flexible, a perk of the VA home loan. This is a number that you can figure out yourself by dividing your monthly debt payment by your pre-tax income. If you are significantly lower than 41%, owning a home could be more attainable than you thought.

Steady Income

Another one of the biggest signs you’re ready to own a home is that you have a steady income. Lenders typically like to see that you have had the same job for two years or more with a fairly steady income. If you are self-employed, all is not lost, but you’ll just have to provide further documentation to prove your stability. The VA home loan also allows qualifying income to come from rental properties, disability compensation, and social security.

You Prequalify

Obtaining a pre qualification letter can help you get approved for a loan as long as nothing changes. This means your credit score, income, job, and debt to income values stay constant while you hunt for a home. While this is optional, real estate agents often ask their clients to complete this step while looking for a home.

You may also like: Can I Get a VA Home Loan if Self-Employed?