"Should I Buy a House?" Checklist

1. Are you going to be in the area for at least 3 years?

- Not saying that you can’t buy a house if you’re only living 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 getting 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 means that you either just lived somewhere for free for 3 years, or someone paid you to do it......... yes please.

2. Do you have a pretty stable source of income?

- This should be very obvious. When you’re buying a house, you’re…well…buying something. 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.

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 buy big things 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 someone about how you can best raise it up. Sometimes you just have to be a little smart about it, and it’ll go up in around 6 months. If you don't know who to talk to, I can help point you in the right direction.

4. Do you have enough change for a down payment?

- You pretty much always have to pay some for a down payment. I know what you’re thinking, “how the heck am I going to get a 20% down payment for the house I want in cash?!?!”

Well….YOU DON’T HAVE TO HAVE TO PUT 20% DOWN TO BUY A HOUSE!

- That is a valuable lesson to learn. This is 2017. You don’t need that much money to buy a house, and the bank isn’t going to just take your house away from you for no reason. The banks and the government have gotten smart and nicer so you will be fine. 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! (Also blog coming soon on this stuff).

- The normal amount in America is 3.5%. Seriously, FHA loans are around 20% of loans given out in the country, and they’re pretty easy to qualify for.

5. Are you tired of living with your parents or wasting money renting?

- Are you living at home and about to lose your mind because you have to be at home before 9:30 or else you’ll get 4 phone calls and a missing persons report?

- Are you paying rent for a house or apartment right now, and have been for some time? All that money you pay each month just flies away and you never see it again.

- Do you want to paint your room the color you actually want it to be, and have a bright red door, but your landlord won’t allow it?

So, are you ready to buy a house? I should be clear, you need to have ALL of these bad boys checked off before you’re ready. If you have everything on this list but a credit score of 307…..you’re not ready to buy a house.