Renting with the goal of buying
If you are a renter hoping to make the leap into homeownership, make sure you are fully prepared for the financial commitments that come with owning a home.
If one day you aspire to be a homeowner, keep your long-term goals in mind. The transition from renting to buying is a big step which requires patience and lots of planning.
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Budget for your total expenses
Determine how much you’ll need to save. A monthly mortgage payment isn’t the only cost you’ll be responsible for when you purchase a home. Homeownership comes with both upfront and recurring costs.
- Down Payments typically range from 3-20% of the purchase price.
- Closing Costs typically range from 2-5% of the purchase price.
- Moving Expenses the total price tag can run from hundreds to thousands of dollars.
- Homeowners Insurance & Property Taxes recurring costs that vary widely from state-to-state and home-to-home.
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Establish and maintain good credit
Your credit is one of the most important factors lenders use when deciding if you qualify for a mortgage loan.
- Start to build a credit history:
- Open a free or low-cost checking or savings account.
- Apply for a credit card and use it responsibly.
- Make all your payments on time and in full.
- Monitor your credit by checking your credit report annually.
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Make a spending and savings plan
Set your goals and find a system where you can hold yourself accountable.
- Determine how much you need to save monthly to reach your goal.
- Carefully track your income and all expenses.
- Trim non-essentials.
- Get committed and start saving today!
Owning a home can provide you with the independence you’ve always wanted, but it’s important to remember that homeownership comes with new responsibilities. When you think you are ready, talk to a housing counselor or industry professional to discuss your options.
Source credit to My Home by FreddieMac
- Start to build a credit history: