STOP RENTINGDate 12-09-2016
Easy to say, hard to do, but there are things you can do now to get you closer to residential home ownership. For years, you have been paying rent to your Landlord or even worse, living with your parents. Here are some things you can do right now to prepare for home ownership.
1. Save Money. Put away a minimum of $50 week. (That’s approximately 2 items at Starbucks per week) If you do this for at least 2 years, you will have saved up $5,200. You can do it!
2. Check Your Credit. Don’t do this often, but make sure you get a gander at your credit report history and see what’s going on there. Stop applying for revolving credit accounts, like department stores, they don’t help, they hurt your score. Only spend what you have. If you do use a credit card, always pay off the balance in full every month. If you already have a balance on your credit card, pay that off as soon as humanly possible. The only ones who benefit from a balance on your credit card are the credit card companies. You don’t want to end up paying $100 for a $5 cup of coffee, you just don’t.
3. Talk with a Mortgage Professional. Find out exactly what it takes to qualify for a mortgage these days. These qualifying requirements change, almost on a daily basis. If you know what you need to do to qualify for a mortgage, it takes the mystery out of the process and gives you a goal. The goal being, getting a mortgage to buy a home of your own.
4. Talk with a Real Estate Agent. Learn what the market is out there and what you think you can realistically afford. Make sure your proverbial eyes are not bigger than your stomach. Don’t try to keep up with everyone else, but rather look in communities that are close to work that you can realistically afford.
5. Stop Accumulating Debt. These days, people are less interested in accumulating things and more interested in accumulating experiences, but keep in mind, both can be costly. Before you take that expensive vacation to hike in Colorado or the Grand Canyon, think about what might be available in your own backyard and accumulate your experiences there so you can stop accumulating debt.
6. Get a Job. Yes, you want to help others and be charitable. It’s an honorable thing to do, but charity begins at home. Be employed and always make money. It’s good to be self-employed, but the problem with self-employment is that you don’t always show a healthy income and that’s what lenders are looking for when they decide whether you qualify for a loan or not. You have to show at least two years of qualified income in order to qualify for a loan. Sometimes, you don’t get that dream job, with that dream income right away, but it’s a step in the right direction and can ultimately lead to home ownership. If you have stable employment, it’s going to make a difference. Remember, home ownership is the goal.
7. Don’t Fear Fluctuating Rates. Mortgage Rates will never be as low as they have been in the past few years, but have no fear! Rates won’t be so high that you will be precluded from obtaining a loan at a reasonable rate.
8. Inventory Will Increase. Yes, for the past few years, it has been a Seller’s market and inventory was definitely scarce. In 2017, however, you will see a change in that scenario. The prediction among most real estate professionals is now shifting and the feeling is that we are moving away from the limited housing inventory and towards a Buyer’s market. The bargains are already popping up in the most unusual places, but you have to be willing to shop.
At Khani & Auerbach, we are doing our very best to remain at the forefront of the real estate market. We will continue to educate ourselves, our clients and real estate professionals. If you have any questions, please feel free to ask us!