Stuck in a Rental Rut?

Have you ever thought about buying a home before? Maybe you’re living at home with family, or just getting out on your own. Or maybe you’ve even been renting for some time and want to do something different.


How do you get there? Why would you want to purchase a home instead of rent? Homeownership comes with many benefits, the obvious being that you’ll have a secure place to live. Financial security is usually higher with homeowners as they have an expectation of what their monthly spend will be on a fixed payment. The home itself appreciates in value year after year as well, giving you an asset that increases your net worth.


We know buying a home is a big financial decision, so we’ve tried to compile some questions and topics for you to think about to help you get there. 


Does it Make Sense? 


One of the most important questions to ask yourself when you think about purchasing a home is how long you’ll plan on living in the home. If it’s less than two years, most experts agree that renting is a more financially savvy option. If it’s more, there is a significant chance you’d be able to sell at a profit (even a small one) and set yourself up for the next step in your life. 


Have you considered the commute? When determining to buy a home, you may want to consider proximity to areas like work, shopping, and medical. If you can only afford to be farther out from theses areas, it may benefit you to do some calculations on travel time and expenses when it comes to paying a mortgage or rent. 


Get Your Priorities In order


The most important thing you can do before starting to look for a home is to make a list of your wants and a list of your needs. While you can put these on the same list, we suggest making two separate lists. It’s unlikely that a home out there will meet every single line item on your lists, so you may want to go ahead and take note of the items that are negotiable. If there are any other decision makers, we strongly suggest having these conversations with them before starting this process to save potential headaches later on down the line. 


When you start looking at homes, it’s important to keep your expectations in check. Don’t aim for perfection. If the home meets seven out of ten items on your list (especially the most important ones like location and school districts), consider how else you could modify the home to make things work for you in regards to the other items. 


Maybe you wanted an updated kitchen, but the home crosses off everything else on your list. Could you forgo a new kitchen with the guarantee you could install one later down the line? 


Think about the possibility of being open to renovations. Even if you want a move-in ready home, it’s good to have that knowledge before starting the search!


Think About The Financials


There’s a lot that goes into calculating your monthly payment. Are you considering extra costs like HOA fees and home insurance? Will you need private mortgage insurance? 

How will you be paying for your home? Do you have a stable job? What’s your current credit score? 


These are all questions that determine your ability to purchase a home. While you can do some of the research and checking on your own, we strongly recommend talking with a lender to see what type of monthly payment you could qualify for (even if you aren’t ready to take the next step). Talking with a lender can give you the steps that you need to take in order to prepare yourself to be financially able to make a purchase.


You’ll also want to consider what type of lending you may use. Different types of loans have different qualification requirements, including the amount of down payment you’ll be putting down. Some programs exist that offer 100% financing, meaning you’ll only be responsible for closing costs and other fees, while other programs require a minimum 3.5% down payment. Talking with a lender can determine what programs and loan options may work for you, so that you can set a goal you can work towards. 


Even if you calculate all the numbers yourself and want to start looking, it’s crucial to stay within the budget that you set for yourself. Lenders typically recommend that the monthly mortgage payment stay at or below 28% of your total income. Even if you aren’t ready to speak with a lender, doing some quick calculations can give you an idea of a realistic monthly budget. 


Take a Breath


Buying a home doesn’t happen overnight (usually). The right time to buy is the right time for you. Make sure you consider everything that’s important to you. You have time to make decisions and with us, you have unlimited access to advice. We can provide you consistent updates on market trends and point you in the right direction when you do become ready. Our team is here every step of the way.