It’s the American dream to own your own home, but this is slowly becoming less and less of a reality for U.S. citizens. Home ownership is declining, with nearly 40% of the population renting instead. This isn’t for lack of desire to own a home. In fact, almost 80% of renters say that they would like to own their own home, but only about half of this percentage would before to afford one in their area. With quickly rising costs for purchasing and renting, it’s difficult to imagine how anyone could stay ahead of their finances and save enough while renting to afford to buy their own home. If, despite these obstacles, you are working toward home ownership, here are some tips for making the transition easier.
Figuring out Your Finances
If you’ve been renting for a while, then it’s pretty likely you don’t have enough money to buy a house outright. This doesn’t mean that you aren’t still able to get home; you’ll just need to find a way to get financial assistance. There are plenty of different loan types out there to fit your needs. You might want to pursue a conventional loan if you have a high credit score. This type of loan rewards people with excellent credit by offering lower interest rates on loans, which will save you more money in the long run. If your credit is less than fantastic, you should consider applying for an FHA loan. This type of loan is more flexible with credit score requirements, giving it a higher approval rate.
After you’ve figured out what amount your loan has been approved for, it’s time to start building a budget to determine what mortgage payment you can afford, along with your estimated monthly expenses. It’s a good idea to live below your means and avoid houses at the top of your budget. That way, you can continue to save money so that you’re less likely to be entirely ruined by any minor, unforeseen financial setbacks.
Finding the Right Home
Once you’ve decided what you’re comfortably willing to spend on a home, it’s time to start searching for the right one. Unless you’re planning to get married or get a significant increase in income, you should go into your search imagining that this is the only home you’ll ever purchase–since, with the way the market is continuing to inflate, it’s likely that costs will just continue to go up for the foreseeable future. You might not be able to afford to trade up on your own. That being said, you must prioritize location when searching for a home since this can significantly affect your home’s property value in the future. Some things in a neighborhood that can improve the value of your home are low crime rates, ample privacy, good average property value, and good average household income. While these factors are subject to change, it is still best to buy property in a neighborhood with all these features and hope that they hold up instead of buying property in a community that lacks them and hoping that things turn around eventually. Buying a property in a preferred school district can also help your home to hold its value.
The Big Move
The stress of homebuying isn’t over once you’ve found the perfect house, signed all of the paperwork to close on it, and been handed the keys. You still have a lot of work left to go before you’re fully settled in your new home. Hopefully, you’ve been using all of this time between when your offer was accepted to now to pack all your belongings, make lists of things you need to purchase for your new home and prep for the move. Now, it’s time to get your belongings to your new home. You have a couple of options for how you want to do this. You could hire a moving company. Doing this eliminates a lot of stress and physical labor for you, but there’s a much higher chance that your belongings will end up damaged if you use movers rather than doing everything yourself. If this is something you want to prevent, you might want to rent a moving truck, call up some friends, and have them help pack it up and unload everything into your new home. Just make sure you reward them with some pizza and cold drinks.
