Homeownership is part of the American dream. While many feel as though they’ll be on the rental train forever, never being able to own a home and build equity for themselves and their family, there is hope. You can move from renter to buyer. Here are the top 3 ways renters can prepare to buy a home.
Start Saving Now
It’s no secret that you need a down payment to purchase your home. What people don’t always know, however, is that you may not need as much as you think you need. Down payment requirements can start as low as 3%. In addition, many cities offer down payment assistance for first-time buyers. Check to see what your city offers and check requirements to see if you qualify. This will affect how much you need to save. However, be sure to include closing costs in your factoring (you can talk to local lenders for estimates on closing costs).
Saving Tips:
Look at your budget and see where you can cut down on luxuries
Look at your bills and expenses and take stock of how you’re spending on necessities to see what you change to help you build savings
If you can, consider downsizing your rental to a smaller apartment where you can redirect part of your rent to savings
Keep separate savings account unlinked from your primary checking account.
Look at Your Credit
Go to www.annualcreditreport.com to get your free credit report
Check for any collections or late payments so that you can address them
Challenge anything that doesn’t belong on your credit report or may have been reported incorrectly
Manage Banking and Employment
Banks want to see steady employment, regular deposits, and responsible balance history. For renters, this means looking at your employment and banking to ensure that you’re where you want to be as you prepare to save for buying a home. As you prepare, consider,
Your career goals and make any needed or desired job changes before you start saving
Making sure that you receive direct deposit or regularly deposit your income into your primary account
If you’re self-employed, make sure that you have an organized way to record your income and that you make your deposits
Your banking relationships. Do you like the bank you’re with? Would you want to establish a mortgage through them? If you’re considering local banks or credit unions for your mortgage, now is a good time to establish a banking relationship directly with those institutions.
Are you looking for a mortgage loan? Can we help you or your clients reach their dream of home ownership? Go to www.meetwithmarat.com to schedule an appointment and talk about your or your client's options.