Lots of people buy and sell homes each year. 40 million Americans move each year, and many of those people move into a new home they buy. The home buying process can come with its ups and downs, though. There may be situations where you owe money or don’t have a traditional stream of income, so you think lenders won’t approve you for a mortgage. However, that’s not necessarily the case.
In fact, you’d be surprised to learn that there are multiple situations that may seem like dealbreakers for lenders but they actually aren’t. Be sure to talk with your lender if you’re in one (or more) of these 10 situations and want to buy a home in the foreseeable future.
Can You Buy a Home With a Criminal Record?
If you have a criminal record, you may be concerned about your ability to find a home. If you’ve dealt with misdemeanor bail bonds in past instances or have served jail time, then there’s a chance you may not get approved for a mortgage. When you apply for a mortgage, the lending company will pull a background check on you. Your criminal record will come up in that background check.
If you’re wondering, “can you buy a home if you have a criminal record?” the answer is: maybe. Different lenders have different policies about lending to people with criminal records. So, if you have a criminal record and one lender denies you, don’t give up. Do your research and see which lenders have more flexible options when it comes to people with criminal records.
Keep in mind that if you owe money due to a criminal proceeding, it could hurt your chances of getting approved for a mortgage. If you owe money to a DUI lawyer, try to pay them off before applying for a mortgage. That way, the lender sees you can pay off your debts and there won’t be judgments against you on your credit.
Can You Buy a Home Without a Loan?
So, can you buy a home without taking out an actual loan for the house? Yes, you definitely can. If you have enough cash saved up, you can buy a home with cash versus financing it through a lender.
There are pros and cons to paying for a house with cash. If you pay with cash, you won’t have to worry about making a mortgage payment each month for years to come, and you won’t have to pay interest. You can also save on fees associated with obtaining a mortgage loan. Plus, some sellers like it when buyers pay in cash. One downside to paying with cash is that a lot of your money is tied up in the property, so if an emergency comes up down the line it could be hard to get cash quickly.
One way to plan for this is to set cash aside in an emergency fund. It’s recommended that you set aside three to six months’ worth of expenses in this fund. You never know when you could need a new roof or if a medical emergency could come up, so be diligent about saving up for this fund.
Can You Buy a Home With a Friend?
You may want to buy a house, but don’t want to buy one on your own. So, you may wonder, “can you buy a home with a friend?” The answer is yes, you can purchase a home with a friend.
How this works is that you both would apply for the mortgage and the lender would combine your incomes and take the average of your credit scores to determine what you can borrow. If you and your friend are financially responsible and have good credit histories, you could get more money to buy a home. You’d also have someone to help you split the bills and repair costs. For instance, one of you could pay the roofing company to do repairs, while the other one hires the plumbing company to redo your home’s plumbing.
Buying a home with a friend comes with some potential drawbacks, too. For instance, if you or your friend decides to get married and buy a home with their spouse, you may have to buy them out of their part of the home or find someone to buy them out. Or, if the friendship were to end, you’d have to own a home with a person you aren’t on good terms with. While this strategy can be done, it’s important to weigh out all the pros and cons before you and your friend make a final decision.
Can You Buy a Home Without a Lawyer?
Buying a home is a big financial decision to make. There’s a lot of money being exchanged between the buyer and seller, on top of some additional stipulations of sale such as repairs being made. However, all this can be negotiated without the aid of a lawyer.
So, when asking, “can you buy a home without a lawyer?” the answer is yes. In fact, many people buy a home without a lawyer. However, it doesn’t hurt to have a lawyer look over the brokerage agreement. There could be things in the agreement that you merely skimmed over, and having a fresh pair of legal eyes could end up saving your sale and saving you money.Can You Buy a Home If You Have Student Loans?
Many people have student loan debt under their belts. So, does that mean they can’t buy a home since they owe tens of thousands (sometimes even hundreds of thousands) of dollars? Turns out, people with student loan debt have options for homeownership.
If you’re asking, “can you buy a home if you have student loans?” the answer is yes. You can buy a home if you have a steady income and you make your student loan payments on time. However, keep in mind that your student loans will impact your debt-to-income ratio, which is a key factor that lenders look at when determining what you’re eligible to borrow. Lenders typically like to see a ratio that’s less than 40%, but it can vary from lender to lender.
Lenders will have to evaluate whether you can keep up with your mortgage, your student loan payments, paying for home heating services, and other expenses that come with owning a home. If you have student loan debt but you’re responsible and make payments on time, you should be able to find a lender to work with you on a home loan.
Can You Buy a Home If You File For Bankruptcy?
Some people think that filing for bankruptcy ruins their chances of owning a home one day. After all, people file for bankruptcy because they can’t pay their past debts. However, if you file for bankruptcy, you could still own a home one day.
If you file for bankruptcy, you may have to wait until two years after you get out of it to apply for a conventional mortgage. However, there are some loans that have you wait only one year, and others can have you wait up to four years. Bankruptcy tends to stay on your credit report for seven to ten years, and it can really harm your credit score during that time. If you file for bankruptcy, you’ll have to take time to rebuild your credit and prove to lenders that you can manage a home loan.
Remember that if you do file for bankruptcy, you’ll have to report all your debts when filing. This includes credit card debt, unpaid bail bonds, and unpaid medical bills.
Can You Buy a Home If You’re a Freelancer?
Being a freelancer has a lot of perks. You set your own hours and your own rates, and you can take on as much or as little work as you’d like. If you’re a freelancer, you may ask, “can you buy a home if you work as a freelancer?” The answer is yes, but it can be a tough process to go through.
One of the biggest things lenders look for in applicants is if they have a stable income. Some lenders may feel wary about approving a home loan for a freelancer since their income may not be traditionally defined as “stable.” A freelancer is at the beckoning call of the gig economy, and if the gig economy isn’t hiring, a freelancer’s income can fall drastically.
However, this doesn’t mean it’s impossible for a freelancer to get a mortgage. If you’re a freelancer, you’ll likely have to provide ample documentation of your income and its stability. Some lenders may also ask you to provide tax returns and business account information to prove your income is stable. They want to make sure you can afford the loan on top of home maintenance issues that may come up, such as repairing the garage door or replacing the furnace. If you can prove that you can afford a home, you should be in good shape.
Can You Buy a Home If You’re Separated From Your Spouse?
If you’re separated from your spouse and want to buy your own home, you may worry about getting a loan in your own name. However, this is something you can achieve with some paperwork. If you apply for a loan and you’re separated, your lender may ask for an official separation agreement. This is because the lender will need to see what debts you’ll be responsible for when you get divorced. Your spouse may also need to sign their rights away to the property you purchase before you’re officially divorced, but you’ll need to discuss those details further with your lawyer.
Remember that if you do provide legal separation or divorce documentation, you may need to get notary services to sign the documents before you bring them to your lender. However, it’s best to talk to your lender and your lawyer to see if that’s what’s best for your situation.
Can You Buy a Home If You Owe Taxes?
If you owe taxes, your chances of getting a mortgage could be compromised. However, it’s not impossible. For instance, you could get an FHA loan if you provide proof to the lender that you have a repayment plan established with the IRS. If you don’t have a repayment plan set up, your chances of getting a mortgage could really fall. That’s because tax debt is still debt, which hurts your debt-to-income ratio and impacts your credit score.
If you do get a house while you owe back taxes, you should manage your finances closely. You may want to save up money to hire a contractor in the home building services to build an addition to your home, but you’ll also need to put money aside for your tax repayment. Make sure you’re budgeting appropriately for your debts while buying a home.
Can You Buy a Home If You Just Bought a Car?
So, you want to buy a house…but you just bought a car. Does that hurt your chances of buying a home? It may be a small setback, but you can bounce back. Most lenders recommend that you don’t make any major purchases before you buy a house since your debt-to-income ratio would increase. However, if you make steady payments on that car loan for three to six months, your lender may see this as stable behavior and consider you for a mortgage.
If you take on new debt on top of a mortgage loan, you’re going to have multiple monthly payments to manage. Make sure you can afford these payments, plus any home maintenance situations that may come up, like the need to hire residential roofing services or an HVAC repairman.
Buying a home is a huge accomplishment in life, and you want to make sure you’re in the best position possible so it’s a smooth process. You may think there are roadblocks holding you back, but there are ways around these roadblocks. The key is to not give up and know that you have options. The more you do your research, the more likely you’ll find a solution that works for you.
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