What Do You Need To Get A House?

By PropertyClub Team
Apr 16th 2023
If there’s one thing that has become a de facto symbol of the American dream, it’s becoming a homeowner. If you aren’t sure whether you’re ready or are wondering what you'll need to buy a house, this guide will explain what to expect.

Homeownership has long been a status symbol that shows that you’ve made it. But, it’s more than just a status symbol. It also means that you get a slew of benefits, including the ability to build equity and have more control over your living situation. 

Unfortunately, it can take a while for a typical person to get all their affairs in order for them to be able to buy a home. Unlike typical purchases, getting a house isn’t just a single-step trip to the store. It requires financing as well as a little bit of legal work.

Before you start looking at real estate listings, you may want to figure out if you’re in the right financial and legal standing to get a house of your own. Here's what you need to know.

hash-mark3 Things You Need to Buy a House

  1. Financing
  2. A Real Estate Agent or Attorney
  3. A House You Want To Buy

Things get a little more specific when you actually take a look at the details of each requirement. Read on to learn more about what you need to get a house.  

1. Financing

The first thing you need to buy a house is financing. Of course, it is also always okay to pay for a house in cash. If you have enough money to pay for a house in cash, you won’t have much problem finding a real estate agent to help you, nor will you have an issue finding a listing. However, most of us will not.

To make sure that you can actually buy a house, you will need to qualify for financing. Here’s what mortgage lenders typically want to see from their borrowers:

  • A Good Credit Score: While some mortgage programs will allow you to be approved for a loan with a score as low as 550, most lenders want to work with people who have scores above 620 at the very least. 
  • Verifiable Income: If you are a regular salaried employee, this will be easy to do with some pay stubs. Otherwise, you may need several years of tax returns, as well as other documentation. 
  • Government Issued IDs: You can’t be approved for a loan without verifying your identity. Lenders will usually require a driving license as well as your Social Security card. 
  • A Good Debt To Income Ratio: Most lenders will not work with someone whose debt-to-income ratio is above 50 percent. The lower your ratio is, the better the chances are of approval. 
  • A Down Payment: The larger the down payment, the more likely it is that you will be approved. Some loans (like VA loans) won’t require a down payment, but most will. A typical down payment can be between 3 to 5 percent for FHA loans, while traditional loans may need closer to 20 percent.

2. A Real Estate Agent or Attorney

The second thing you need to buy a house is an experienced real estate agent or attorney, but you shouldn’t just hire anyone. When talking to real estate agents, make sure that you find one who has plenty of experience. 

The ideal real estate agent is someone who has access to several MLS databases, sells at least five homes, and knows the local area well enough to give you a good idea of what to expect upon move-in. The more connected your real estate agent is, the better. These tips below will ensure that you get the best person for the job:

  • Ask for referrals: An agent who doesn’t have referrals is a risky bet, simply because there is no way to see if they will be reliable. 
  • Interview at least three agents: The more agents you interview, the better. Your goal is to find an agent that you feel comfortable with, and who works well with the way you like doing business.
  • Ask smart (and difficult) questions: Don’t be afraid to ask tough questions when you first meet the agent. It’s not awkward; it’s seeing if they know their facts. If you aren’t sure what you should ask, read up on good questions before you make an appointment.
  • Search up your real estate agent online: If you see articles about a lawsuit issued by a former client, you might want to choose someone else.
  • Find a real estate agent who works with your community and your schedule: If you don’t have a real estate agent who knows the lay of the land, this won’t turn out well for you. On a similar note, you should opt for a full-time real estate agent since this is a time-consuming process.
  • Read reviews: Avoid an agent that has bad reviews like the plague. A real estate agent that has bad reviews may botch paperwork, push through a deal in bad faith, or just make the entire process take longer than it has to.

If you choose to skip the realtor, you'll need to work with an experienced real estate attorney. Don't just go with your family attorney, find someone who focuses on real estate transactions, as they need to be able to ensure your purchase goes smoothly. 

3. A House You Want to Buy

Once you have contacted a real estate agent, it’s time to get to the part that everyone loves: finding your dream home. This can be done through your realtor’s help or by looking at listings on a major real estate website like Zillow. 

When choosing a home, make sure to keep within your budget. Otherwise, you may not be able to actually move forward with your purchase. 

hash-markCan You Afford A House?

Though you might have a job and savings for a downpayment, you still might not be able to afford a home in the area you want. Before you take a look at listings, it’s good to take a look at home affordability calculators online. 

Home affordability calculators will give you a better idea of what you can afford in terms of a mortgage and potentially help connect you to lenders who want to pre-approve you for a loan. Give them a try to see what you can afford.

hash-markGetting Pre-approved

When applying for a mortgage, you will need to find a lender interested in working with you. To do this, you will need to get pre-approved for a mortgage. You will have to reach out to a lender who services loans in the area you want to move to.

The lender will take your financial documents, run your credit score, and determine if you are potentially a good match for a loan. Once you get a pre-approval, you are ready to start looking for a real estate agent. 

hash-markIs It Hard To Buy A House?

For most people, putting together all the documentation and getting their finances in order is going to be the toughest part of navigating the real estate world. How hard this will be varies from person to person, as well as the overall economic state of the area that you want to move to.

With that said, most people will be able to find a way to buy a home with a few years of working towards that goal. 

hash-markAre There Any Programs That Make Homebuying Easier?

If you need a little help, it’s possible to get it through the use of social programs. Some of the most popular programs include the FHA loan system, VA loans (for veterans), as well as special housing discount programs. 

To find out if you are eligible for affordable housing or to find out if you can get assistance for housing in your area, check with your local Housing and Urban Development site. Most states will have a department that’s dedicated to improving homeownership rates among families who have low to middle incomes. 

Each program has its own qualifying traits for buyers. So, before you immediately discount this option, find out what each program offers. Even if you have a fairly decent income, there’s a good chance that you might be able to find a way to get a leg up.

hash-markGetting a House Bottom Line

If you look at getting a house from the most basic of standpoints, your homebuying requirements will be very straightforward. There are three things you will need to have to buy a house, and they are financing, someone to help guide you through the process, either a real estate agent or a real estate attorney, and finally, a home you’re interested in buying. 

If you are in the market for a new home, getting a house means that you have a lot more freedom and an opportunity to build equity. That’s why many people consider it to be a part of the American dream. Of course, getting your first home is going to be a bit of a journey, especially if you aren’t sure whether you have what’s needed to buy a home.

The good news is that most people will be able to find a way to get their finances together so that they can eventually buy a house of their own. Between taking the time to focus on homeownership and potentially having programs to help you out, you should be able to find a way to reach your goal.