Owning your first home is a big step towards financial responsibility. To some, it may seem like a sisyphean task to far out of reach. In all actuality, if you’re renting you’ve already acclimated to a set payment schedule which is half the battle.
The other half is owning what you’re paying a big chunk of your income towards. People are expected to pay anywhere from $1200 to $2000 a month, depending on location, for monthly rent. This is money that can be working for you.
When do you make the change from paying someone else’s mortgage to paying your own? If you have a steady W2 job, a couple of credit cards you’ve been paying on for a few years with low balances, bring home at least $3,000.00 a month in income, and are a military veteran or active duty, the time is now.
If you’re not a veteran, there are alternate programs that will get you in the door, literally. If you’re not a W2 wage earner and are self-employed, or get 1099 income, you need at least two years in the same job or company under your belt. It also helps to have a little money in the bank as well. If any of the earlier applies then proverbially, there is a shining light at the end of the tunnel.
Cash is always king. If you had a scale and were to put credit on one end, and cash on the other, cash would outweigh credit. So, if you’ve had credit issues, bankruptcy, foreclosure, domestic separation, all resulting in derogatory blemishes on your credit profile, having a down payment of 5%-10% can pretty much trump the credit issues.
As a matter of fact, what a lot of people don’t know, is there are private lenders out there that will loan you money with the ugliest of the uglies of credit, as long as the home you’re buying is an investment property. The interest rates and terms of these loans horrendous. However, it’s not a bad strategy to purchase an investment for flip purposes and turn around a profit if you know what you’re doing. Be careful, because the last thing you want is to get stuck in a private money loan.
At the end of the day if you have a decent income and are a responsible human being home ownership is within your grasp. All you need to do is take the first step and get pre-approved for mortgage financing.
Entering the mortgage industry in 2001, Paul Hampton has over 18 years of mortgage lending experience with over 3,000 mortgage transactions closed. This Southern California native began his career at Ditech.com, a division of GMAC Mortgage.
From 2001-2005 Hampton was a part of the refi boom of the early 2000’s, closing an average of 50 mortgage loans monthly leading him to a member of the Ditech.com Presidents Club. This tempo of loan originations empowered and fueled his mortgage knowledge early on.
In 2005 Hampton joined Lenox Financial Mortgage in Costa Mesa CA. Shortly thereafter he became sales manager of the internet loan originations division and grew that department to 33 mortgage loan officers with a total monthly funding of over twenty million in gross revenue. His role in management broadened his knowledge of the mortgage industry from compliance, to secondary markets, to customer service retail and wholesale. His 13-year tenure at Lenox Financial Mortgage was instrumental to his mortgage lending prowess during a kaleidoscopic financial era.
Currently Paul Hampton is Vice President for The Money Branch, The Temecula Branch of Geneva Financial specializing in VA and government loans, as well as FHA, FNMA, FHLMC, USDA, and Non-QM.
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