Baby On The Way? Consider These Factors When Getting A Home Loan

Baby On The Way? Consider These Factors When Getting A Home Loan

Purchasing a home with a baby on the way can be both exciting and nerve-wracking. You’ll need to consider how much money you will have available for monthly payments and any other expenses that may arise during pregnancy and after childbirth. When getting a loan from a bank or mortgage company, it’s essential to consider these factors so you don’t end up over your head before getting started!

Here are some crucial factors you need to consider when applying for a home loan with a baby on the way.

1. Increase in Expenses

Your income and total expenses are important factors that lenders like Fundwise consider before handing out a loan. With a baby on the way, you should expect your expenses to increase.

Pregnancy could lead to higher food and healthcare costs. That’s why you need to have a clear picture of your income and total expenses before applying for the loan because lenders are more likely to approve loans that don’t exceed 40% – 50% of gross monthly salary.

It would be best to reduce expenses by cutting out unnecessary items such as eating out, partying with friends, or buying unneeded items. Try to go into budget mode to meet the terms set by lenders.

2. Expected Increase or Decrease in Income

If you are expecting an increase in income, make sure to inform the lender of this factor. The growth can be from various sources, such as investments or freelancing. In some cases, a parent leaves a job to take care of the child, reducing the total income. This also means added pressure on the other parent as now they’re the only bread earner.

Lenders will factor in income fluctuations because if your salary is reduced, you may have a hard time meeting the terms they set. Banks and other lenders may decrease their loan amounts to ensure they don’t lose money should the borrower fail to make payments. You need to be prepared with an alternative source of income.

3. A Long-Term Commitment

Paying off a home loan is a long-term commitment; you have to consider your current financial situation, the home you are looking to purchase, and how it will affect things like your family if anything were to happen.

Fundwise, the premier funding agency in Provo, can help you secure your lending options by offering easy-to-access loans at an affordable rate. We can help you buy a comfortable home for your family so you can live the American dream.

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