Are you Ready to buy a home? You can find out if you're ready to buy a home by asking yourself some questions:

Do I have a steady source of income (usually a job)? Have I been employed on a regular basis for the last 2-3 years? Is my current income reliable?

A steady income is one of the most important factors a lender will use in determining whether or not to approve you for a loan. Steady job history suggests that you will be able to pay back a mortgage loan. So, what would be looked on as steady employment? Generally, if you have been working consistently for the last two years, a lender will consider your job history stable.

Do I have a good record of paying my bills? Do you have good credit?

Lenders want to know if you handle credit responsibly and if you can be trusted to make payments on your mortgage.

Before you are given a loan, your lender will run a credit check to verify your debts, your monthly payments, and the length of time remaining on those debts. Before applying for a home loan, you should check your credit report on your own. That way there are not surprises, and you can make corrections if need be.

If you have never used a credit card or borrowed money, you can establish a credit history by compiling documentation of payments to landlords and utility companies. This is not the time to apply for new credit, or get in to further debt.

Negative credit information would include late payments, repossessions, judgments, liens, and bankruptcies. A few late payments probably won't prevent you from getting a home loan, but if you have had a foreclosure or declared bankruptcy, you will most likely have to wait a period of time before lenders will grant you a mortgage loan.

Do I have few outstanding long-term debts, like car payments?

If you already have long-term loans, and have been paying them on time, then great. This is not the time to enter into a new log-term debt. New debt will only increase your debt ratio.

Do you have the money for a down payment and closing costs?

In recent years many people bought homes with not money down and even went asw far as the Seller paying the closing costs. Mortgage lenders have since change the loans they provide and generally require the home buyer to make a down payment of at least 5 percent. Closing cost will range from another 3 to 6 percent.

If buying a $200k home, this amount could range between $16k through $22k in just closing cost.

That's no small change, but there are some government-sponsored loan programs that require little or no down payment for qualified borrowers. It might be possible for you to apply for a Veterans Administration (VA) loan or a Federal Housing Administration (FHA) loan to assist you.

Do I have the ability to pay a mortgage every month, plus additional costs?

The mortgage is not the only expense of home ownership! Most people buy a house and right away want to change the house color, plant, make changes and maybe make some upgrades. After a while of owning the house, other expnses will come along. The Air Conditioner breaks down, the refrigerator breaks, the washing machine, the roof, and many other possible expenses. It's always best to have additional funds in reserves, after making your down payment and closing costs.

If you can answer "yes" to these questions, you are probably ready to qualify for a mortgage loan to finance buying a home.

Lets continue!