You’ve been renting or residing with family for a while and you’re tired of living in someone else’s home. Maybe family is getting too close for comfort or you’ve have had enough of the neighbor, who always slams his apartment door. These are common reasons I hear when a first time home buyer is ready to purchase a home. If you are planning to buy and are currently renting, think ahead. The planning can be weeks, months or even years. Having a game plan will help you be prepared so when the time is right, you will be able to make your move. The following are five things to do when preparing to buy a home.
Structure any lease in your favor: If you are renting, structure any lease so you are able to move when you want to. Since a landlord will want security that the rental will be occupied, she will often provide incentive to the renter, by exchanging a lower rent payment for a 6 month or one-year lease. If you are about to enter the market don’t sign that lease! While a landlord will probably charge you more if you go month to month, having the freedom to decide when you can move will save you money in the long run.
Avoid large purchases: Because it could affect your ability to get a loan, your lender will emphasize the importance of not making large purchases prior to buying a home. While you may see the car or television you’ve always wanted, avoid buying it until after your home has closed. Once it’s all yours, you can fill the garage or fill the perfect “TV size wall” with the toy of your choice.
Visit neighborhoods: Even if you have an idea of where you want to live, you may not know the areas as well as you think. Drive through your favorite neighborhoods at different times of the day and night.
Save! Not only will a down payment lower your monthly mortgage amount, you will want a nest egg for expenditures once you become a home owner. Once the home is yours, you may want to make upgrades. Also, while not something that you want to happen, planning for unexpected repairs is a very good idea. Even though you hope it doesn’t happen, unexpected repairs may be needed. Position yourself to save by choosing to spend your money wisely. Having a lower rent or car payment will enable you to put more money in the bank.
Contact a real estate agent: (Or me 🙂 Even though you may be months away from your purchase, having an agent as a confidant will make you that much more prepared when you are ready. Visit open houses or ask a friend for a referral. Let that agent know that you want to work with them. He or she will provide you all the information you will need so you will be fully prepared once the home buying time is near.
Home ownership is very exciting and a big responsibility. Owning enables you to take control of your life and begin to make your finances work for you. The more planning and wise decisions you make, will put you in a position to purchase the home you’ve always dreamed of.
SOURCE: Coldwell Banker Bain Blog