Transition from renting to owning a house: Here’s what you need to know & do

Because of high start-up costs, houses are a long-term investment. Owning a house will give you the chance to build equity and sell for a profit.

We’ve put together this guide to help you make the transition from renting to owning a house: Here’s what you need to know and do.

It Takes 30 To 50 Days to Close on A Home

What is the closing day? It’s the grand finale in the mortgage process. It’s the moment when you take ownership of the real estate. It’s set in the contract signed between you, the buyer, and the seller after you accept the offer.

The average time it takes to close on a home is between 30 to 50 days. If your loan application is missing anything, then the mortgage approval process is pushed back. Reasons can include debt that should be paid off, updated bank statements that are needed, issues in the title search, late payments or collection accounts in your credit report.

You Have to Pay Off Debts and Improve Your Credit Score

Consider your credit score as your report card. When taking out the loan, the better you score, the lower the interest rates you’ll be offered. Credit scores range from 350 to 850, and anything over 700 is good.

Credit utilization represents about 30% of your score. It’s how much debt you owe compared to your credit. You can lower your credit utilization by paying off debts or increasing the amount of credit available to you.

It’s easier to pay off your debts. However, you’ll need to take a strategic approach. A few strategies include the debt snowball, debt avalanche or the snowflake technique.

Get Pre-Approved for A Loan

You’ve probably heard of preapproval before, but it’s mostly applied when you take out a mortgage. It’s an offer for a loan waiting for full approval. It’s valid for several months but doesn’t guarantee the funding.

To guarantee you get the best loan terms on the market you should contact the professionals. Get in touch with Habito, which is the fastest, easiest and free to use online mortgage broker worldwide. Through this online mortgage calculator, you can work out what you can afford and the approximate costs of your loan. When you want to apply for a loan first check if you can be pre-approved by the lender you choose.

You can do this by submitting all documents required by the preliminary loan application. You then wait for the review of your file from the mortgage agent and you’ll receive the preapproval or denial of the loan. A pre-approval will show you that the lender is willing to give you the funds you need, and you’ll have an estimate of the loan’s costs.

Knowing the potential interest rate and other attached fees to the loan can help you work out your finances.

Learn as Much as You Can About the Home Buying Process and All the Costs, Steps, Factors, And Instruments Involved

Buying a home is not an easy process. It’s not as simple as in Monopoly. First, you’ll need to choose a real estate agent who has your best interest in mind. Then, work on finding a lender to help you take out a mortgage.

Your realtor can offer some advice on what lenders are suitable for you. Start brushing up on your credit score. Next, you should apply for a mortgage pre-approval, so you can determine what you can afford and get an overall idea about interest rates and incurring costs.

Work with your realtor on creating a home wish list and search the available listings. Pick your favorite houses and visit each one. Next step is to make a competitive offer for the house you prefer.

After the negotiations, and agreeing on a price, move onto getting the final mortgage approval.

Hire an Experienced, Helpful Real Estate Agent to Offer Advice and Guide You Through the Transaction

An experienced and customer focused realtor can bring tremendous value to your real estate transaction. By fully understanding your preferences, budget, and motivation, an agent can narrow your search and identify great properties.

An expert who is looking out for your best interest will do everything to protect you during price negotiations.

The paperwork required by a real-estate transaction can be exhausting. It’s much easier to get help from a realtor with the entire process. An experienced realtor will also tell you what to look out for before it’s too late. The title could have issues or maybe the property has electrical issues that need to be sorted.

Owning a home is a big step you’re taking towards financial stability. As a homeowner, you’re building equity, rather than giving your money away to the landlord.

Remember, the transition from renting to owning a house comes with a path you need to follow to get the best outcome.

Speak Your Mind