4 Tips on Transitioning from Renting to Buying
Many renters dream of the day when they will own their own home. Somewhere they can paint the walls, customize their appliances and add their special flare to. Somewhere where they won’t have to ask permission to have roommates or furry friends. Somewhere they won’t have to fight over parking or listen to their neighbor’s television through a shared wall. There can be a lot more freedom and advantages to owning your home instead of renting. There can also be many disadvantages as well. Here are some tips to help you prepare for making the exciting transition from renting to owning.
1. Prepare your financial background
Your credit score will affect your interest rate on a home. If you have a higher credit score, you will pay less interest. Although this may sound backwards to some, the banks see a lower credit score as a higher risk loan and apply the interest rates based on that judgement. It is usually a good idea to speak with a loan officer long before you decide to buy. There are many other aspects that mortgage loans are mindful of other than just credit score. If you switch jobs, pay structure or industries recently it may affect you. Depending on the kind of debt you have, you may want to pay down certain debts before others to help with the process. Consulting with someone qualified will allow you to be certain of what to get in order to get the best rate.
2. Budget your time and money
Making a home is a big responsibility. Maintaining a yard will take more time then you originally expect. If you have an HOA, read through their requirements to make sure you fully understand the new level of responsibility. Repairs will cost you both money and time. Sometimes you have to weigh what your time is worth VS. paying someone for a repair. DIY projects can cost time but save you thousands. One example of this would be building a new deck instead of paying a contractor to do it. Doing it yourself can be extremely labor intensive and take many weekends of sweat equity, but you can save thousands of dollars. The best course of action with repairs is to do your research and find out if it is a reasonable project to complete without hiring someone. Having friends that are willing to help and using YouTube to find DIY videos can both be lifesavers here.
3. Learn more about your neighborhood
Owning a home is usually a more permanent than renting. Find out as much as you can about the neighborhood you are moving into before you buy. If you get irritated by a neighbor, it’s not so easy to sell your house fast and move. Try your best to get to know your neighbors and be on good terms with them. Sometimes neighborhoods and communities have activities that will help you become acquainted with the people around you. If they do, you may even want to go to these events before you move so that you can get an idea of the environment, perks and problems in that neighborhood to help you make a decision.
4. Budget for tools, furniture and accessories
If you lived in an apartment before and are transitioning to a house, keep in mind you will need landscaping tools. Lawn mowers, hedge trimmers and accessories will come at a cost. If you decide that you will be making some of your own repairs, you will need tools. Many of these tools you will need right away when you move, so it is a good idea to factor that in to the preliminary budget. For bigger, more long term projects (like the deck), you can purchase tools a little at a time. You may end up needing to purchase a washer and dryer if you were leasing that with the rental unit. Having more room in your own home may also mean that you need to furnish additional rooms.