Washington, DC remains a competitive market for anyone looking to buy, with low inventory and high buyer demand keeping listing prices near the mid-600s. The more prepared a potential homeowner can be, the smoother the homebuying process. That’s why it’s essential to know if you’re truly able to invest in your first piece of real estate.
Consider these six signs before purchasing a home in Washington, DC.
You have strong credit
First-time home buyers need proof of strong credit to become pre-approved for a mortgage loan. Without pre-approval, it’s much more challenging to purchase a home. Most mortgage lending sources will have a minimum requirement for credit scores
, usually in the 620s. A good credit score shows lenders that you’re responsible with your money and can be trusted to pay back debts.
Have your credit score evaluated to determine where your credit lies — if your score is high, that’s a great sign you’re ready to buy your first home. If your score isn’t so great, try to work on making improvements. Get strategic with how you’re paying off your current debt. Don’t add any additional debt to your credit cards or take out any loans.
You know what you need (and what you want)
Many young renters don’t know what they need or want in a home. They’re used to having many of their amenities provided onsite or by the landlord. But when considering buying a home for the first time, what should first-timers look for?
To start, you should know how much space you’ll need, both indoor and outdoor. If you’re looking for ample yard space and rooms for children, guests, and entertaining, you may need to search for multi-bedroom homes on a sizable plot of land. If you only need two bedrooms and access to a local park to walk the dog, a condo closer to downtown might be a better fit.
Once you get past the number of bedrooms and bathrooms, the yard or patio space, and the style of home
you’re looking for, you’ll want to think through the kinds of heating and cooling systems you want. Do you want central heating and cooling or electric radiators and AC units? Do you need additional storage in a garage, attic, or basement?
Overall, once you know what you need and want in a home, you’re one step closer to being ready to buy. You might start the search at Washington DC open houses
, or you can start with the following steps.
You’re starting a family
Wanting to start a family is an excellent sign that someone is ready to buy their first house. In dense areas like Washington, DC, renters face tiny spaces with low square footage. Studio or one-bedroom apartments aren’t spacious enough for those wanting to add children to the family. Two or three-bedroom homes are ideal, and there’s no shortage of options in DC.
But if you’re hoping to start a family within the next two years, start looking at listings for Washington, DC
homes for sale now. Home prices rose over 5% in 2021, with units selling at around $640,000. As mortgage rates continue climbing higher, you’ll want to get into the mix as soon as possible. Don’t wait until you have a little one on the way—find your family home first and secure your spot in DC before they arrive.
You have dependable income
Dependable income is huge for first-time homebuyers. Homeowners need to be able to pay their monthly mortgage rates and any HOA and insurance fees. If income isn’t dependable, it can be easy to fall behind on payments. And missing mortgage payments can, over time, lead to the filing of a Notice of Default or even foreclosure.
Before looking into houses for sale in Washington, DC, be sure your income has been steady for at least two or three years. You want to make sure you make enough to cover all of the monthly payments you’ll incur and continue to make enough for the duration of your mortgage. That doesn’t mean you have to work at the same company for 15-30 years or never move again but analyze your income streams to make sure there is a low likelihood that they’ll change suddenly or significantly.
You want to stay put for a while
Renting is often the best choice for those who plan to move regularly. For students, young professionals, and newly-married couples, renting may be the way to go. It’s more flexible, often tying tenants to 12-month leases at maximum, meaning they can easily move on once the lease is up. However, buying is a wise investment for those more settled in one particular area.
Think through where you picture yourself in three to five years. Are you expecting a big move at work, a change in career, or a move closer to family? If you are ready to put down roots, you’re likely to check out Washington, DC homes for sale.
You can afford the upkeep
A mortgage isn’t the only expense first-time homebuyers can expect when signing the closing papers. Yes, one key sign that you’re ready to buy a house is that you can afford the mortgage and the down payment. But there are a lot of differences between renting and owning
, one of which is the cost of upkeep.
The landlord often covers repairs to AC units, appliances, and minor damages in an apartment or rental house. This can save renters thousands year after year. But homeowners have to cover those costs themselves. The upside to this is the freedom to make any renovations or changes to the house you want.
Ultimately, potential homebuyers know they’re ready to look for houses for sale in Washington, DC, when they’re aware of the added costs of upkeep and maintenance. If they’re willing and able to budget for annual heat and electrical inspections, roof repair, and other issues, it’s a good sign they’re ready to buy.
Homes for sale in Washington, DC, are an excellent investment for first-time buyers, but they must be prepared. With the market as competitive as it is right now, new buyers need to know precisely what they’re looking for and have the income dependability to manage climbing listing prices. If you’ve checked off each item on this list and are ready to invest in your first home, contact the real estate experts at The McKenna Group
to get started.