5 Factors to Consider Before Buying a House

Buying a house is no small financial decision. 

There are a lot of different things to weigh. And honestly, the process can be difficult to navigate if you’re not sure what you’re doing. 

For most people, buying a house represents a major stepping stone in their journey through life. 

It represents their status as homeowners and puts them in a more secure position for their financial future. 

There are actually many benefits to home ownership. 

Owning your own home gives you the opportunity to hedge your position against rising rent rates. It also gives you the power to build equity in something that’ll increase in value over time. 

But here’s the challenge:

Buying a house will require you to consider a number of factors first. 

And in this blog post, we’re going to dive in and cover 5 of the most important ones. 

Here’s what you need to know. 

1. Your Income

It’s really important to consider your income before buying a home. 

Firstly, you’ll need to be earning a certain amount to even qualify for a loan. 

But secondly, you want to make sure that buying a home is the right move for you to make at this current time and place in your financial journey. 

Do you plan to be relatively consistent with your income? If not, it might be time to rethink the home-buying decision and to at least put it off to a point where you can be sure that you’re going to be able to keep up with the payments for the long term. 

2. Your Career Trajectory

There are some careers that make it more difficult to buy a home. 

For example—if you’re self-employed freelancer or gig worker, then you may need to jump through a few extra ‘hoops’ to get that mortgage loan to come through. 

You can also run into some issues with buying a home if you’re a physician or medical professional who recently graduated from school (due to a disproportional debt-to-income ratio). 

Here’s the thing. 

There are tools to help you in these instances—you just need to know how to find them and use them. 

For example—this blog post by LeverageRX describes the fastest way to get a physician’s mortgage loan—which is a special type of loan designed to help doctors get mortgage loans, even when they’re fresh out of medical school. 

3. The Location

Do you know where you want to put down roots?

Are you sure that your current area is the area you really want to settle in?

These are important questions. And obviously, it’s important for you to be clear on this.

Buying a home will, at least to a certain extent, require you to stay in that specific area for at least a while—because you can’t necessarily pick up your new home and move it. So when you take a look at House and land packages on the Sunshine Coast, or wherever you are planning on laying down roots, make sure that it is the perfect one for your situation.

Buying, and then turning right around and selling, can be a pretty inefficient process—and it’s usually better to just continue renting if you think there’s a chance that you may be moving soon.

4. Your Credit Score

You’ll need at least a decent credit score if you want to purchase your own home. 

As a general rule, you’ll need a credit score of at least 620 or higher before you’ll be able to qualify for a loan. 

But it’s also a good idea to grow your credit score to a higher limit than this. 

One thing to think about is this—if you work on paying your existing debt payments on time, and if you can just generally start to chip away at your debt-to-income ratio, you can generally make quite a bit of progress in raising your credit score. 

Or, if you’re a physician, you may need to get a specific type of mortgage (like a physician’s mortgage loan) to help you close the gap in the short term. 

5. Your Down Payment

And last, but certainly not least—the majority of home loans require you to come up with a down payment for your new house in addition to qualifying for the mortgage loan. 

For an FHA loan, this usually means that you’ll need 3.5% or so—though there are also some loan programs that empower you to come up with less than this. There are even some circumstances where you can get home loans without a down payment. 

It really just depends on the specifics of your situation. 

Conclusion

There you have it. 

5 factors to consider before buying a house. 

Equipped with this information, you should now be ready to move forward with your mortgage process and get qualified. 

Good luck! 

You’ve got this.