Things to Prepare Before Becoming A Homeowner

Many renters want to know what they can do to get ready to buy their first house as rent costs continue to rise. According to recent ApartmentList.com data:

“The first half of 2021 has seen the fastest growth in rent prices since the start of our estimates in 2017. Our national rent index has increased by 11.4 percent since January . . . .”

If you’re a renter, rising rental rates may make it seem difficult to save for homeownership. But the reality is that there are things you can – and should – do to prepare for your first house purchase. If you’re ready to learn more about how to avoid increasing rents, here’s some professional advice.

Start saving now, even if it’s a small amount

When it comes to saving for a down payment, experts agree that putting aside what you can – even little sums of money – in a separate savings account is an excellent place to start. Founder of Zero-Based Budget Coaching LLC Cindy Zuniga-Sanchez says:

“I recommend saving for a home in a ‘sinking fund’ . . . . This is a savings account separate from your emergency fund that you use to save for a short or mid-term expense.”

Saving in tiny amounts, according to Zuniga-Sanchez, can help you achieve a major objective, such as saving for a down payment:

“Breaking up your goals into smaller bite-sized pieces by saving incrementally can make a large daunting number more manageable.”

Examine your finances and improve your credit score

Another suggestion from experts is to examine your entire budget and credit score and seek for methods to minimize your debt. The average credit score of first-time homeowners is 716, according to the HUD. There are several internet resources that can assist you in determining your credit score if you are unsure. Don’t be concerned if your score falls below the national average. Keep in mind that there are homeowners with credit ratings both above and below the norm.

If your credit score is below the national average, there are numerous steps you may do to repair your credit before applying for a loan. HUD advises working down debt as much as possible, paying payments on time, and managing your credit card wisely.

Now is the time to start talking to your advisor

Finally, speak with someone who is knowledgeable about the market and what it takes to become a first-time homebuyer. That’s where we can help. A trustworthy advisor can assist you in navigating your particular market and walk you through all of your alternatives. Having the appropriate network of real estate and financing specialists on your side can assist you in planning for the homebuying process, determining what you can afford and how to get pre-approved when you’re ready.

Most significantly, we can assist you in comprehending how homeownership is possible. Lauren Bringle, a Self Financial Accredited Financial Advisor, says:

“Don’t write home ownership off just because you have a low income . . . . With the right tools, resources and assistance, you could still achieve your dream.”

Bottom Line

The best thing you can do if you want to be a homeowner one day is to start preparing now. Even if you don’t plan to buy for several years, meeting with a trustworthy real estate expert to learn about the process will help you succeed on your path to homeownership.