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5 Ways to know you are ready to buy a home!

By
Real Estate Agent with REALTY PROS
Washington DC real estate like all big cities, has a growing segment of the population that rely on the rental market for housing. In fact, Washington DC is known to have the 6th highest rent in the country, even higher than New York City and LA. The average 1-bedroom is $1,495 per month and increasing at a steady rate.



The constant question I get from potential dc homebuyers is "How do I know when I'm ready to purchase a home?"



Here are 5 ways to know you are ready to purchase a home as follows:



1. My rent is equal or greater than a mortgage--For many renters, the realization it is time to purchase a home comes when they compare dc rental prices to a potential mortgage payment with an online mortgage calculator. It is said that 80% of all first-time homebuyers start their homesearch online.



2. I have a good credit score.--A credit (FICO) score is a major determinant for purchasing a home. Banks are relying more on credit scores to determine a homebuyer's financial risk. The minimum credit score for an FHA loan is 620. Some potential buyers are monitoring their credit scores using websites like freescore.com. This website allows you to check all three credit bureaus whose average scores will determine your ability to purchase a home. If you require credit repair services, I highly recommend contacting Leonard Smith at Veracity Credit Consultants as follows:

Email: lsmith@veracitycredit.com

Phone: 303.260.4670



3. I have been saving money.--It is now more important than ever to start saving money to purchase a home. Banks are requiring more money for downpayments. I encourage first-time homebuyers to save a minimum of $10,000 before thinking about purchasing a home. If you plan to receive money from your parents, it is encouraged to have that money sitting in your account at least 1 month before purchasing a home.



4. I Plan to live in Washington DC for at least 2 years--To me, this is an important criteria for deciding to purchase a home. If you are planning to live in Washington DC for more than 2 years, then it doesn't make sense to throw away your money on rent. Renters should invest their money in purchasing a home.



5. I need a tax deduction.--The major benefit for purchasing a home rather than renting is the tax benefit. Many homeowners who itemize their taxes are able to deduct 100% of their mortgage interest and property taxes from their income tax returns. Homebuyers can also deduct a portion of your closing costs such as your origination fees or discount points to the lender. When selling a home, sellers who make any profit (or capital gains) are exempt from income taxes. Here is a list of homeowner tax benefits.



DC couple thinking about purchasing a home



Hopefully you found this post useful! If you need help finding or selling your Washington DC home, please contact Jason Trotman at 301-452-4767. If you’re new to DC, I’d especially like to extend a warm welcome. I value the opportunity to help my clients find the home that meets their needs and provide them with professional, reliable service.

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