Do You Hope to Move from Renting to Buying This Year?
The end of a year is a good place to start – some good habits for a new year, that is! Are you hoping to move from renting to buying a home this year? Then there’s no time like the month of January to get started on these 5 habits. Start here. Start now for a seamless transition from renting to buying in the New Year.
5 Good Habits That Will Pave the Road from Renting to Buying
Start saving for a down payment right away
Unless you’ve received a sizeable inheritance, you can never start saving for a down payment too early. For a $200,000 home, the recommended 20% down payment is $40,000. That’s a lot of money, and most people don’t plan for it like they ought to.
The best way to start saving for a down payment is to automate an amount from every paycheck into your savings. Yes, automate saving a small amount of every paycheck. Set it up to go right into a separate savings account named “Down Payment.” Exercising the discipline and perseverance to set aside money for a savings account is tough. But setting up automatic savings makes it easier, and you won’t miss it. Money can be “out of sight, out of mind.” You won’t spend what you don’t see to spend.
By the way, a down payment of 20 percent is not a requirement. There are other options, but it’s best to save as much as you can. Start a savings account with your very next paycheck.
Pay down debt and pay your bills on time
Can’t say this enough, “Pay off debt and pay your bills on time.” Mortgage lenders want to see that you’ve paid off past debts. They also want to see that you are paying your credit cards and other loan payments on time. If you’ve been late in the past, get current and stay current. Even if you make $250,000 a year, a mortgage lender will likely deny a mortgage if your credit card payments are always late. Keep in mind, lenders favor not using more than 30 percent of your available credit, too. Pay down as much debt as you can before applying for a home loan.
Live on a budget
Owning a home isn’t necessarily pricier than renting. It depends on your area. Do your homework and compare the costs of renting versus buying a home. If you expect your mortgage payment to be larger than your rent payment, create a budget that factors that in. When you live on less, you get used to it. Then you won’t choke when your monthly mortgage payment becomes a reality. You’ll also be able to save more for the down payment and pay down debt.
Learn how to do your own repairs and maintenance
When renting, repairs are the landlord’s responsibility. That’s nice. Learn the basics of property maintenance while renting. What if your new home has a lawn? You’ll need garden hoses, a lawn mower and other maintenance tools, because lawn care will also be your responsibility. It would be wise to add home maintenance as a budget item, too.
Knowing how to do basic home repairs and maintenance will save thousands of dollars as a homeowner.
Get to know the real estate market
Here’s something else you should do while renting – get to know the real estate market. Prepare before you’re ready to hire a real estate agent and start touring homes.
Browse homes online to get a sense of what is available. Find out what you can afford and how much of a down payment you should be saving for. This saves you from disappointment when you begin touring homes.
And Now You Know How to Pave the Way from Renting to Buying
Now you know 5 good habits to start now to move from renting to buying a home this year. Hiring an agent may be in the somewhat distant future, but there is plenty for you to do right now. Change your hope of buying a home into a reality in 2017. This is a huge purchase, and it requires some preparation financially and mentally.
Call Charles D’Alessandro, your Brooklyn real estate agent with Fillmore Real Estate today at (718) 253-9700 ext. 206 or email [email protected]. With over 30 years of experience, Charles has the expert real estate agent skills needed to help you prepare to purchase your first home.