From Renting to Owning
Many renters today want to get out of the habit of paying someone else’s mortgage. The perks of home ownership are varied and many causing many potential first time homebuyers to consider making the leap into the housing market. But making that jump is not easy. Here are some tricks to keep you moving towards your goal.
Budget – Quite possibly the hardest item to take control over when you are renting is your budget. Take into account your current monthly rent and other necessary monthly payments before determining what you can cut out. Can you turn off cable and switch to cheaper video streaming services? What about limiting your morning coffee purchases? Figure out how much you can save a month and set that money aside in a separate account so you will be less likely to spend it.
Timeline – The timing of everything lining up perfectly can be tricky. First, take a look at your current lease terms. When is your lease agreement terminated? Determine if you will have enough saved up by that date to move into your own home or if you will need another year or more renting to help you get the cash you’ll need for a down payment and closing costs. It is likely there will be overlap of your renting days and home ownership so be sure to plan in advance in case you will be responsible for a month of more of double payments.
Goal – What exactly is your goal? Is it to own a property? Do you have a specific arrangement in mind? Knowing if you want a single family home or a condo can be hugely helpful in determining what exactly you will need in order to make your goal a reality. It will help you create a realistic timeline and save the appropriate amount.
Credit – Be sure to pay your monthly rent on time. Skipping payments or paying late can affect your credit score and therefore your ability to qualify for a home. Keep this in mind with your other bills too. Apply for automatic payments if that is what it takes to keep you on track and your credit score creeping upwards.
History – Having a residence history is also helpful when making the leap to home ownership. Proving you are a reliable and trustworthy resident will be favorable when a lender is determining if they will loan you money and how much. Building up a positive history can be helpful when securing a home of your own.
Making the move from renting to owning is not a necessary step in life. Many people enjoy the idea of renting and not being tied to a property. But for those who like the idea of stability and the opportunity to upgrade and remodel aspects of a home, these tricks should help make the transition a smooth one.