Home ownership is a dream of many across the United States. Instead of paying extravagant rent, sometimes accounting for 15-30% of the average income, we hope to put our hard earned income towards a permanent placement. If you are hoping to purchase this year or still planning for a future homestead, these tips can help you be an informed and ready buyer.
Just A Dream
Buying a house takes time, don’t feel rushed into buying before you are not ready. If home ownership is still a dream, take this time to decide what your life might look like in 5 years. Where do you want to settle down? Are you planning on having children? Animals? Are you planning on changing jobs? Once you decide these key factors, when you look for a home, you will have a solid foundation on what you want and need in a home.
2-5 years away
Save, save, and save some more.
A healthy down payment will be an excellent tool when purchasing your perfect home. The general rule of thumb is 20% of your house’s total. There are programs that help with first-time home buyers, when down payments are as little as 3%, but several costs may pop up as the home buying process progresses. Zillow cites that you will encounter 2-5% extra of your home cots. That means for some, your upfront payment could double! Look at your finances, are you ready for that?
Get your credit in check
A credit score above 760 can change so much about your purchasing power. Not only will you qualify for more houses, your interest rate will be dramatically different. The difference in a 5% and 3.5% interest rate is a $200 difference in payment per month. This adds up to $72,000 over a 30 year period! Work hard to keep credit card spending at bay, settle any past debts, and stay current with any other loans.
1 year away
Prepare to move
Usually within a year before you buy, you will be deciding to end your lease. Throughout living in your rental, a few details might become hazy. Be sure to get an actual copy of your lease, read it thoroughly. Make sure you are well aware of:
- The actual end of the lease, you need your exact move out date to avoid late fees.
- The option of month to month. This might come in handy; when you buy a house, several roadblocks can pop up unexpectedly and your move it date may be pushed back. Have a back-up plan ready for if this does happen.
- How much notice you need to give. This can vary place to place, usually from 30-90 days. You want to be compliant in letting your leasing company know when you plan on moving out.
- What is expected of you when you leave. This can be re-painting walls, deep cleaning, replacing light bulbs. These chores can take time and money so give yourself time to complete the tasks without stress. You want to get your full deposit back (furniture money!).
A few months away
Decide who will be providing your natural gas needs. A new residence can mean a new start with a better natural gas provider. Check our Kratos Gas & Power for your energy needs.
Start to sort through your items. This is an excellent time to channel Marie Kondo and shed some unwanted junk. Remind yourself that each bag you get rid of, is one less you need to carry.
Start to inventory your furniture. Your new place has a different layout from the last, be sure to check start measuring rooms and deciding where furniture will go. This will make moving a smoother process, you can drop the items in their rightful rooms with ease. This can also show you what you might need to get rid of or buy. Several charitable causes will pick up decent furniture for free and give you a tax credit.
Buying a home is like a second job, so be sure to prepare yourself at any and every step of the way. Home ownership can be a huge step in creating your dream living environment.