Washington DC real estate like all large metropolitan areas, has a growing portion of the residents that depend on the rental market for housing. Washington DC is best-known to have the 6th highest rent in the united states, even higher than New York City and LA. The average 1-bedroom is $1,495 per month and increasing at a consistent rate.
The regular question I get from would-be dc homebuyers is “How do I know when I’m ready to buy a residence?”
Here I will discuss 5 ideas on how to know you are ready to acquire a house as follows:
1. My rent is equal or greater than my mortgage-For many renters, the recognition it’s time to purchase a property comes when they do a comparison of dc rental prices to a potential mortgage payment with an online mortgage calculator. It is known that 80% of all first-time homebuyers start their homesearch online.
2. I have a excellent credit score.-A credit (FICO) score is a major determinant for acquiring a property. Banks are relying more on credit scores to determine a homebuyer’s financial risk. The lowest credit score for an FHA loan is 620. Some potential purchasers are monitoring their credit scores using websites which allow you to check all three credit bureaus whose average scores will verify your ability to purchase a home.
3. I have saved money.-Now it’s more significant than ever to start saving money to invest in a property. Banks are demanding more money for downpayments. I recommend first-time homebuyers to save a minimum of $10,000 before thinking about buying a residence. If you plan to get money from your parents, it is encouraged to have that money deposited in your account at least 1 month before investing in a property.
4. I intend to reside in DC not less than 2 years-To me, this is an important key elements for choosing to purchase a home. If you are planning to live in Washington DC for longer than 2 years, then it doesn’t seem sensible to waste your money on rent. Renters should dedicate their money in investing in a home.
5. I need a tax deduction.-The major advantage for purchasing a residence as opposed to 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.
Learn more about washington dc real estate. Stop by Jason Trotman’s site where you can find out all about first-time homebuyer information and what it can do for you.
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