4 Things to Consider Before Jumping Into Buying a Home

HOT TAKE— just because interest rates are expected to decrease in 2024, doesn't mean you're ready to take on a mortgage.

If your pockets aren't lined with gold and your credit is as sketchy as your Uber driver, then keep reading. I want your dreams of homeownership to become a REALITY. And while God is real, magic isn't. So put in some work between now and GO TIME.

1. Improve your overall credit

2. Up your $ reserves

3. Take an honest look at your job security

4. Don't overlook your mental and physical health

Tips for Credit Improvement

First thing's first. It's more than a score. You can have a decent score but have a checkered history. If you Google 'credit score pie chart' you'll see a simple visual, you'll see that payment history & amount owed are the most important categories. If your credit is under 640, a fall in interest rates means nil. Life is hard but don't let a low score shake your dreams. Just get to WORK on creating a realistic plan for yourself.

-Owe more than one credit card company or collection agency? Take a dive into the Snowball Method by Dave Ramsey. And then apply it to your repayment methods.

-Late payments remain on the credit report for seven years. The seven-year rule is based on when the delinquency occurred. So if you're stuck in this kind of timeframe, then focus your energy on tips 2-4 and spend your time intentionally

-Calculate your DTI. You can probably plug your numbers in online to see where you're at. Lenders like to see a debt to income ratio of 36% or less. So if you can look at your monthly bills and trim the fat (do you really NEED the ultimate sports channel package?), you can make quick progress

Tips for Upping Your Reserves

If you don't have $10k+ in your savings account, make that your goal before jumping into the housing market. Sure, if you're a veteran or plan on taking advantage of a USDA loan, you may not need this much $ but you still have a due diligence fee + earnest $ deposit, and closing costs coming out of your pocket.

-Are you aware of your weaker spending habits or just glazing over them? If the latter, take a look at reducing unnecessary expenses. Some people's income can double and they are just as broke because they wind up spending more. The "if I just got a raise", "if I could just win the lottery" mentality isn't going to get you any closer to your goals. Be real with yourself about putting even $10/mo into a high-yielding savings account. 

-Don't be discouraged if you're starting at $0. A starting point is just that. 

-I recently took my money out of SECU and placed it at Ally because I wanted my hard-earned $ to work for ME! Type in 'high yielding savings account" and then compare them to what your bank is doling out in interest. Make the switch if it's right for you

Tips for Assessing Job Security

Two points. Some of us are employed in professions that cannot be automated or will be shielded from any pending recessions while others are more at risk if the economy continues like it is. I don't have any special points to make about that other than if you see the writing on the wall and layoffs are coming, make multiple plans. Are you going to ride it out and see or do you need to hop on Indeed.com? What's best for you should have nothing to do with loyalty to your employer!!!!!!!!!!!!!!!!   The other point, job hopping, especially one field to another, from a lending perspective is a non-starter. Lenders like to see you in the same/similar field/position for a minimum of 2 years.

-Do you need a second job or a side hustle? If you're healthy and aren't caring for your children/parents, maybe now's the time. There's TONS of gigs out there that range in commitment and skill level. Why not apply for a higher paying position at your current workplace? You might not get it but damn if you don't try! And what a confidence and financial boost that could be!

-Who is stopping you from posting that fancy mirror or those nightstands that are just taking up space in your rental? Try Cherish, OfferUp, FB Marketplace, or Poshmark. I know Plato's Closet does us DIRTY but if you don't want to invest much time or don't want to have a yard sale to unload unused clothes, then hey, fill up those trash bags and see what you can make shake!

Tips for Mental & Physical Health

I'm here to tell you that if you're suffering in one of these categories, you DESERVE to feel better. Don't closet your feelings or your pain. Seek professional help and if you aren't getting support from those in your circle, or they are super negative when you share what's going on, maybe cut out talking to them when it comes to these topics. My thoughts on mentioning this are simple. If you're unhealthy and you take on a mortgage payment, it could result in a personal crisis that could put you in a nearly impossible financial position. 

-Don't dismiss your personal health concerns. If $ is your obstacle, start Googling or really just call a doctor's office that's local and tell them that you cannot afford the cost of care. They will HAVE to take time to connect you to someone that can help

-From my teaching background in a low-income area, I've learned that there are TONS of programs and non-profits in and around Charlotte that WANT to help and will. But there's a lack of readily-accessible information for the masses. Heck, call a public school (whether you have kids or not) and ask to speak with a counselor on staff. They should have a list of resources for you

-Call on Jesus for strength and resolution. If that sounds silly to you, let me know. I fall short everyday, but I'd be happy to chat more on this note.

Bottomline. Stop WAITING for rates to come down and take the reins on improving your financial health. Be honest with yourself and use the internet for whatever you need to learn. I want to see you financially healthy and on your way to homeownership!

Want to talk more? Reach out.