Most people would dream of owning a sizeable, impressive, and expensive home. However, if you’ve just recently started working, you shouldn’t be aiming for your dream house anytime soon. In most cases, you shouldn’t even buy your first property with your ideal residence in mind. Here’s why:
Limited Financial Capability
Most likely, since you’ve just started, you won’t be able to afford your dream house yet. To be approved for a home loan, your salary should be able to sustain the monthly mortgage, taxes, and maintenance of the property while still providing for your basic needs. You may need to have a raise or a promotion to afford the house that you’re eyeing. Simply put, you cannot be approved for a home loan if your pay grade isn’t high enough.
Restricted Mortgage Options
As your career is just beginning, there would be limited mortgage schemes you can apply for. While you can ask for expert advice on home loan packages, they might give you the more standard and costly plans. Some of the more adjustable schemes, such as the FHA 203k loan program, need more extensive work histories for them to be approved. As a rule, Primary Residential Mortgage, Inc. explains that a longer work history means better chances of being approved.
Showing proof that you have savings or other means of earning can improve your loan approval rate. However, if you choose to buy a large and luxurious residence, odds are you won’t be accepted at all. This is especially true if you can’t present proof of long-term employment, banking, and savings. Along with unpaid dues, outstanding payments, and overdue bills, the absence of a savings account can also result in rejection.
There’s nothing wrong with dreaming for an ideal home, you just have to work at it a little longer. Be practical when choosing your first property purchase and make sure that you pay on time. When your career rises, your chance at credit approval will also increase.