3 Tips to Prepare for Buying a Home

3 Tips to Prepare for Buying a Home Jill Schlesinger: You seem very comfortable. You seem all relaxed. Female: I just came from a party. Jill Schlesinger: Could you spend 30 seconds with me? No, busy. No one wants a free financial advice. Female: Depends. Jill Schlesinger: Why? You want to know the topic? It’s an easy topic. Female: What’s the topic? Jill Schlesinger: Money. Female: Oooh. Jill Schlesinger: Do you like that? I’m Jill. The American Museum of National History has over 30,000 specimens including the largest collection of dinosaur fossils. Let’s see if some museum goers need financial advise. Jill Schlesinger: Where you guys from? Female: Wisconsin. Jill Schlesinger: That’s so cool. I like Wisconsin. Female: Alright. Jill Schlesinger: So what’s going on you big Wisconsin cheeseheads? What’s going on? Female: Well, we just recently got married. Jill Schlesinger: Congratulations. That’s awesome. Female: Almost two years ago so I guess we’re just looking to move forward, to buy a house and just get on track with that kind of thing. Jill Schlesinger: Okay. So have you guys like gone through the prequalifying and go talking with mortgage brokers or anything like that yet? Female: We haven’t just because he recently switched jobs so we are just kind of figuring out where in Wisconsin we are going to be. So now that we kind of have a better idea, now we’ll move forward. Jill Schlesinger: Alright. Are you ready for your steps? Female: We’re ready. Jill Schlesinger: This is going to be good. Okay, number one, you got any old debt, you got to pay it off, right? So are you feeling good about the debt levels that you have now? Female: Kind of, we’re making progress. Jill Schlesinger: Alright. So bang that out. So pay down any old nasty credit card debt because first of all, it’s harder to qualify for a loan when you have all that outstanding. So pay that nonsense off. Then, make sure that you have an emergency reserve fund. So God forbid, either of you lose your jobs, you have six months, maybe a year of expenses that’s just in the bank, safe, safe, safe stuff, okay. Next, you got to save for the down payment. You know how much you need? I’m going to tell you, you’re going to need 20% of whatever your purchase price is. So you go on and you look at the house and then you’re like, okay-- what does an average house cost here? 200 grand? Female: About, yeah. Jill Schlesinger: Okay. So 200 grand, you guys need to come up with 40G’s before you can buy a house. Are you ready to do that? Female: We will be. Jill Schlesinger: Yeah, that’s right. So there you go baby. Okay, so that’s what you’re working towards. You’re working towards finding enough money in your budget to have 20% because you’re not going to pay a mortgage without that. But at least, you got something to work towards. Comb through those numbers get that money saved and then you will be in great shape. Because you know what, the housing market is not taking off on your. It’s going to be pretty depressed for awhile. This is an awesome time to be saving for a house, look around, make sure you know what’s going on. And of course, hit your parents up if that’s possible for a down payment help, okay? Female: Sounds good. Jill Schlesinger: Alright, that last part. I don’t want you to go crazy with that but I mean, if they want to help, just say thank you very much. Female: Absolutely. Jill Schlesinger: Alright. Thank you so much. Have a great time.