3 Easy Steps To Help You Go From Renting To Owning

Becoming a homeowner takes much more than just a desire to buy a home. It takes a lot of effort on your part to save up for a down payment (which is normally a pretty good sized chunk of cash), research neighborhoods, get pre-approved for a loan and other steps. Fortunately, there is a good possibility that you may be able to say goodbye to renting and hello to homeownership, especially when first time homeowners-to-be keep the following tips in mind:

Find The Down Payment Money

In order to leave the land of rentlas, you are going to need a down payment. While its fairly common to put down 20 percent, some lenders now allow a substantially smaller amount, and first-time home buyer programs may go as low as 3 percent. Sure, a smaller down payment is exciting. However, even a 5 percent down payment on a $220K home is $11,000 (not exactly pocket change).

If saving money doesn’t come naturally for you, no need to worry. With some relatively minor lifestyle changes you can supercharge the down payment savings process. Come up with a savings plan to determine how much you need to set aside every week or month and simply “find” that money in your budget.

Using the $11,000 example from earlier, if buying a home within the next two years is your priority, you’ll have to come up with about $458 a month to put into your down payment fund. Take a close look at your monthly bills and determine what you can trim down or eliminate completely (maybe the $75 a month gym membership that is rarely used). Eat out less, and cut back on Starbucks to only twice a week instead of every day and if you need to, consider a side hustle on the weekends. If you sit back and look through your current spending, it may be easier than you think to find the $458 that needs to go directly into your down payment savings.

Avoid Identity Theft

Unfortunately, the chances of becoming a victim of identity theft increase when you are buying and moving into a new home. The stacks of paperwork that are part of the home buying process are filled with your personal information. Try to make sure that these documents don’t accidentally find their way into the wrong hands.

Check Your Credit

When you start the pre-approval process for a loan, your credit report will be pulled numerous times. Your credit score will then be used to determine if you are approved for a loan. It will also affect what type of interest rate you can get. Check your score and get pre-approved as soon as possible. Don’t wait until you have the whole down payment saved for a price range that the banks may not even approve you for.

If you have a credit card that has been issued through your bank, call and see if they will run your credit for free. Some credit cards even offer a free monthly credit report.