For many people, renting in Reston makes sense. This is especially true for people who are just starting out. Those who plan to move in the near future are better off with a rental than buying a house. However, once you’ve decided to stay for five years or more, the balance starts to tip, and it makes more sense to buy. Most people have to be strategic about how they plan to afford a house, especially their first one.
First you need to see where your money is going. Track your expenses and make a budget. Figure out how much you’re paying in bills every month--rent, a car payment, insurance, phone, utilities, credit cards, student loans, and any other recurring bills. Add in what you pay for groceries, gas, and other necessities that vary from month to month.
You’ll Get a Better Loan for Reston Real Estate if You Don’t Have Debt
Next, you need to pay down debt. There are a couple of reasons for this. First, the lender is going to look at your debt to income ratio when they decide how big a loan to give you. You will be able to borrow more if you have less debt. One good way to pay down debt fast is to pay off the smallest debt first. Then take the money you were paying on that debt and add it to the payment on the next smallest debt. Pay the minimum payment on the others, or more if you can manage it. While you’re working on debt, get your credit report. Make sure that it is accurate and correct any errors.
When you have a handle on your debt, start saving for a down payment. Having a large down payment will also enable you to buy a larger or nicer house. Saving will also give you a chance to tweak your budget and get used to putting aside enough money every month to have an emergency fund, if you aren’t already.
This is a long term plan that will get you on solid financial footing when you switch from renting in Reston to being a homeowner. Feel free to get in touch with our office if you want more information on the house buying process.