The hot water heater crapped out (again), the garbage disposal is plugged up (again), your landlord refuses to answer his gosh darn phone (as usual), and you’re pretty confident that the upstairs neighbors are hosting Marching Band practice every night. You’re done. You’re ready to say goodbye to apartment complexes, partially returned security deposits, and discrimination against your furry roommates. But what do you do??
You buy a house, that’s what! A place to call your own! Your very own humble abode! Your sanctum! Your castle! Your…home.
But having the desire to fire your landlord isn’t enough. Buying a house isn’t like buying a computer or a car. You can’t impulse buy a house. There’s a lot of ducks to get in a row before you even start shopping. But don’t worry! It’s not that scary! Stick with me, and I’ll walk you through a quick checklist of making sure you’re ready to start home shopping so that when you DO find your dream house, you can buy it with no surprises.
Here are five things to check to determine if you’re ready to leave landlords and apartments behind forever!
1. Do you make enough money?
A great place to start here is a mortgage calculator (Like this one!) Make sure you’re calculating payments that include principal, interest, taxes and insurance. Also, if you think you want a townhouse or a house in a community with an HOA, you’ll need to account for those costs as well. As a general rule, your payment should be around 25-30% of your gross income. If you’ve never had a problem making your rent payment, that’s a good number to start with.
You’re also going to need savings. When it comes to buying a house, there are upfront costs, and ongoing costs. Upfront costs are things like your down payment and closing costs, and also some hidden costs like moving. If you’re buying a house with more square footage than where you’re renting, you may also want to add some furniture. Ongoing costs include your payment and maintenance. If your water heater or garbage disposal goes out, you’re not calling a landlord anymore. Those costs are your responsibility now. So you’ll want to have savings for those just-in-case scenarios.
2. How’s your credit and debt situation?
Are all of your credit cards maxed out? Have you missed some payments, or have you been 30+ days late on some payments? Your credit history and the amount of debt you have are two crucial areas that lenders look at to determine whether or not you can buy a house. If your credit isn’t great and you have a ton of debt, it may not necessarily preclude you from buying a house, but you probably won’t get the greatest terms. You’ll likely end up qualifying for less, and at a higher interest rate. It’s a good idea to get your debt under control, and to stay on top of your credit score. Credit Karma (https://www.creditkarma.com) and Mint (https://www.mint.com) are great tools for tracking your credit and overall financial picture. And they’re FREE!
3. Have you been on the job long enough?
Lenders want to see certainty. Most will require that you’ve been at the same job, or at least in the same industry for at least two years. Job-hopping or having long gaps in employment is going to make it very difficult, if not impossible, to get qualified for a loan. Even a change like going from salary to commission-only within the last two years could affect your ability to qualify.
If you’re unsure about any of these first three, a great place to start is to call a lender and have a 10 minute conversation about your situation. A good one will be able to tell you how much house you can afford, or what you need to work on before you qualify. They may suggest paying off debt, saving more money, or that you need to stay in your job for a little bit longer. But the farther in advance you know these things, the more prepared you’ll be for when you’re ready to start shopping! If you need a recommendation for a lender, give me a call and I can put you in touch with the very best!
4. Do you love where you live?
Variety is the spice of life! If you’re the nomad type and you love to pack up and move to a new city every few years, renting is FOR SURE the best option. The costs of buying and selling a house, plus potential market fluctuation can mean financial disaster if you’re trying to move every few years. BUT if you’ve hunkered down, planted your roots, and are planning on sticking around for at least the next 5+ years, buying is a GREAT idea!
5. Do you want a sense of accomplishment?
This by itself is definitely not reason enough to buy a house…but if you’ve got all of the above ducks in a row, and you’re still unsure of whether buying is the right move, let me tell you what I tell all of my first time buyers. After closing, after all of the anxiety and stress of the buying process and the moving process has gone away, you’re going to have a moment. Maybe you’re laying in bed. Maybe you’re watching a movie in your living room. Maybe you’re pulling into the driveway after work. But you WILL have this moment! You’re going to realize that you OWN a house! This house! And you’re going to swell up with pride and realize that you’ve accomplished something that about 35% of Americans will never do. And it feels FREAKING amazing! It seems silly now, and maybe it even feels too far in the future to fathom, but it is a very POWERFUL feeling and it can build your confidence to where you feel like you can do ANYTHING!
Again, this isn’t a standalone reason to buy a house, but if you’re on the fence and everything else makes sense, that feeling of accomplishment is a fantastic springboard to improving other areas of your life!
Buying a home can be extremely rewarding emotionally and financially. There’s a reason it’s been called the American Dream. But you have to be ready. The checkpoints above are a great starting point. If you think you want to at least explore the idea of buying a home, you are always more than welcome to call or text me to ask questions and get answers. If you determine that it’s not for you, that’s ok too!!
As a final thought…if you’re sick and tired of your landlord, if you’re sick and tired of your neighbors, if you’re sick and tired of feeling like you’re flushing money down the toilet on rent…but you’re unsure of whether or not you can buy a house…let me just say that YES YOU CAN! It might take some prep work and some time, and it might be a little scary, but you can ABSOLUTELY do it. And there are professionals out there that can guide you through the process and make it easier than you ever imagined!
So if the next time your shower won’t drain is the final straw, or if your upstairs neighbors next Tuesday Night Tap Dance Party sends you over the edge, give me a call and let’s get you on the path to becoming a homeowner!