3 Questions to Ask Before You Buy a House

Whether you’re thinking about buying or are already in the market for a new home, make sure you ask yourself these questions before making a move:

1. What are my “musts”? As you start your home search or are considering a particular home, make a list of your “must-haves.” These are your top priorities. They might include a certain number of bedrooms, a garage, or a specific school district. Note which items are not up for negotiation so you can refer back to this list as you look at homes.

To maximize your options, limit your “must” list to items you can’t easily change after purchasing the home. For example, you can’t change the home’s location, but you could easily switch out the flooring.

2. How long do I plan to stay? Consider various life factors that might influence how long you’ll live in your next home. Will you likely relocate due to a job transfer? Are you getting ready to settle down in the next couple of years? Is your family growing?

The answers to these questions will help you determine if it’s a good time to buy and, if so, what size and style of home to include in your search.

3. How’s my credit? If you’re planning to take out a mortgage to buy a home, your credit score will be a crucial factor. Lenders look at this number to determine the amount of money they are willing to loan you and at what interest rate.

Credit scores range from 300 to 850. Scores between 750 and 850 are considered excellent, while scores lower than 650 are considered weak. You can get a free copy of your credit report annually from the three consumer credit reporting agencies: Equifax, TransUnion, and Experian. Examine these reports carefully to determine if everything is correct and if you’ll need to raise your credit score before you can qualify for a home.

If you need assistance with your credit, feel free to give me a call. I can provide additional resources to help put you in a buy-ready position.

Student Debt Could Buy Every Home on the Market

If you wanted to buy all the homes on the US real estate market, you’d need around $780 billion, according to Realtor.com. To pay off all the outstanding student loan debt in the US, you’d need $1.5 trillion.

Why is student loan debt nearly double today’s real estate market? It’s because almost 43 million Americans are shouldered with student loan debt, and this burden is blocking many of them from homeownership.

This statistic isn’t surprising when we compare the typical down payment for a home to average student loan amounts: $26,000 versus $34,500. Twenty-six percent of Millennials say student loans are the main obstacle they face when trying to save up for a down payment on a home.

Fortunately, there are many options for buyers in this situation. If you’re among them, here are some steps you can take to put yourself on the right track.

Improve your debt-to-income ratio: This ratio is key to qualifying for a mortgage. Lenders want to make sure you can handle the additional house debt with your current income. To improve your ratio, pay down (or pay off) any debts where you can, and increase your income if possible. Consolidating your student loans may also help.

Improve your credit score: Your credit score is another critical number that lenders consider. To increase your score, pay all your bills on time, avoid opening new lines of credit, and lower your use of credit. It’s also a good rule of thumb to check your credit report at least once each year to ensure it is accurate. If there are any errors, report them to the credit bureau immediately.

If you or someone you know is facing student loan debt and are interested in learning more about your options, I can connect you to a mortgage professional who can help you make owning a home a reality.