Should I Buy a House Checklist
Should I Buy a House Checklist
Are you wondering what all you need to do before you are ready to buy a house? Maybe you are wondering how much money you need for a downpayment or if your credit is decent enough to be able to buy. Well, check out our checklist below to help YOU determine if you are ready to buy a house.
1.)Will you be in the home for at lease 3 years? 🏡
This may sound like an odd thing to consider before buying a house. It's not that you can’t buy a house if you only plan to live it in for 2 years, but this is the normal time period to beat capital gains tax. Capital gains tax is a tax you have to pay when you make profit on selling a house. You know what? There’s a lot to go into on this, so instead of doing it here, if you want to geek out with me about this go ahead and click here. So, while you’re paying your mortgage each month, you’re building equity. All that to say, if you’re going to be there for at least 3 years, you’re going to be making some cash when you sell it or at least break even. That essentially means that you either just lived somewhere for free for 3 years since you would get a return when selling, or another way to put it someone paid you to do it......... yes please!
2.)Do you have a stable source of income? ✈️
This should be very obvious. When you’re buying a house, you’re…well…buying something and that cost money. Very similar to renting, you pay some each month. So, to be able to pay that, you probably need an income unless you’re just Richie Rich and you’re covered for life. In that case, just go buy a freaking house and stop reading this. 🤑 If you have a job that you don’t expect to lose in the near future, you can go ahead and check this one off the list.
3.)Is your credit score decent(above 620)? 💯
- Follow up question: do you know what credit is?
- Second follow up question: if you know what it is, do you have any of it?
A lot of people don’t have any credit, which is fine, but it’s time. You should get some credit so you can make large purchases, such as a home, in the future. I know it might be scary, but as long as you’re responsible, you’ll be fine. You can do this by simply getting a credit card. YOU HAVE TO PAY IT THOUGH OR THINGS WILL GET WORSE. MUCH WORSE. If you have bad credit, no problem, just talk to a lender or financial representative that specializes in credit repair to help you put a plan in place to raise your score. It may be as easy as paying something off or something you may not even know about so step one is to definitely know your score and make a plan from there.
4.)Do you have enough saved for a down payment? 💰
You are probably thinking, "No I do not have 20% of the purchase price saved for a down payment." But guess what? YOU DON'T HAVE TO HAVE 20% ANYMORE! Nope, those days are now over. You don’t need that much money to buy a house. Usually, having a smaller down-payment and using the rest of that cash on another investment will give you a better ROI. If you have questions about that, I’d love to fill you in with some knowledge. Just know that the normal amount in America is 3.5% of the purchase price as your down payment. FHA loans are around 20% of loans given out in the country, and they’re pretty easy to qualify for. If you want more information on loan types, feel free to give us a call and we will put you in touch with our awesome lender Jim Smith with North Point Mortgage.
5.)Are you tired of throwing away money on renting? 💸
Look, we get it, it costs as much to rent these days as some people's mortgages! Plus, you have to worry about your rent going up each year, insanely high pet fees, your loud neighbor upstairs and the worst part is no return on your investment. That's right, all that money goes out the window.
So, are you really ready to buy a house? I should be clear, you need to have ALL of these checked off before you are ready. If you have everything on this list but a credit score of 307…..you’re not ready to buy a house. However, we encourage you to reach out to let us help you put a plan in place so that you can be ready in the future and connect you to others that can help as well!
As always, if you have any other questions about real estate in general, just let us know! We are happy to help!