In the US, 63% of families own their own homes, while 37% rent their homes from landlords. While there is nothing wrong with renting, a lot of people believe that it is simply throwing money away – instead of paying to buy more of a property each month, you are putting money into the pocket of your landlord and gaining nothing for yourself.
The average two bedroom family home costs around $800 each month to rent. This means that per year, renters are throwing away $9600 on average. That’s a lot of money to be wasting each month, isn’t it? Hence why, so many families are keen to buy a property of their own, rather than renting.
Bearing that in mind, the issue is that going from renting to buying can be tricky, especially for families. So with that in mind, below are some tips for making the transition from renting to buying a little smoother, should you want to take the leap and get on the property ladder.
Save, save, save
The first step to buying a property of your own is saving up for it. To have any chance of getting a foot on the property ladder, you will need a deposit. This should ideally be ten percent of the value of the properties that you are looking at. So if you are looking at places in the price range of around $300,000, then you will need a deposit of $30,000. The cheaper the places you are looking at, the lower deposit you will need. To make saving up easier, put a family budget in place and ensure that everyone sticks to it. Put by whatever you can after rent and bills are paid. It might take time, but you will reach your goal.
Look into loans
Once you have your deposit in place, the next step is to look at what home lending companies offer in terms of support and advice about getting a mortgage. It can be hard to get a mortgage if you have bad credit or don’t earn a good income. However, don’t let that put you off – there are plenty of companies that you can try if you aren’t successful the first time around.
House hunt & hand in your notice
As soon as you are sure that the financial side of things is sorted, the next step is to house hunt and hand in your notice. Whatever you do, don’t rush the process and hand in your notice too early. Otherwise, you could be left homeless. Take your time viewing properties, don’t rush things, take it slowly. When you find a property that you love, and that is within your price range, make an offer, and see if it’s accepted. If it is, then you can hand in your notice. Just make sure that the escrow on your new home fits the period when you will need to move out of your rented accommodation.
There you have it, a guide to going from renting to buying as seamlessly as possible.
*Disclosure: This post was submitted on behalf of PennyMindingMom.com.