10 Steps to Go from Renting to Buying in the Lillington Area

Going from being a tenant to a homeowner can be an intimidating move. While there are some parallels in each process, purchasing your first home is a significant milestone and should be a positive and memorable experience. To help you navigate the process, we’ve put together some tips and resources so you can finally leave the renting life behind.

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Leaving the Tenant Life Behind

Feeling like it’s time to stop living under someone else’s roof? Don’t let the idea of buying a home keep you renting. It’s a process many renters go through after years of leasing, and it’s one that Ann Milton Realty knows inside and out. We’ll provide you with the roadmap to the home-buying process and work with you every step of the way to answer questions and guide you to a decision that lands you in a comfortable and inviting home.

Step 1

Know Your Options

If you’ve been paying rent this whole time, it’s all you really know. There’s no flexibility to it and no alternatives that can make your monthly responsibility any lower. The same can’t be said for buying a home. Mortgages and loans aren’t “one size fits all,” and you’ll find there are quite a few options.

You’re not just walking into a bank and asking for a mortgage. Take the time to understand every payment option that can land you in your home and determine what you’ll qualify for and which is most beneficial.

Step 2

Consider the Differences

Renting and owning are two very different things. Even looking beyond rent versus mortgage, it can be a different lifestyle altogether. You won’t have a landlord to fix anything that breaks. If a major appliance fails, it’s on you to replace or have repaired.

This isn’t meant to scare you out of buying your home, but you should make sure you understand the differences between being a tenant and a homeowner.

Step 3

Get Rid of Debt

When you apply for a mortgage, the lender will consider any open debts attached to your name. Whether it’s a credit card bill, a care note, student loans, or an unpaid medical procedure, it’s all factored into the final decision. Order your credit report to check for bills you may have missed, collection accounts, and any other outstanding items that need to be paid off. Additionally, consider reducing your credit card, but don’t make one lump payment. It’s better for your credit score to pay over time.

Your credit score is one of the most important aspects of tackling your debt. Keep your eye on it to prevent surprises that can make securing a mortgage much more difficult. Challenge any accounts that look frivolous or you know are not yours.

Step 4

Calculate What You Can Pay

We’re not talking about just your monthly mortgage payment. While you will need to sit down and figure that out, you also need to remember owning a home requires more than just one outgoing payment. As a tenant, you likely paid for gas, water, electricity, and trash. However, did you have to worry about homeowner’s insurance, which is quite a bit different than renter’s insurance? Were you paying the quarterly property taxes? Did you have to pay extra each month for landscaping or pool maintenance?

It’s very likely you’re going to take on more monthly expenses when you buy your home. Take the time to break down estimates for each expense to know approximately what your monthly payments (including the mortgage) will be.

Step 5

Study the Market

The real estate market is ever-changing. Home prices go up and down, making it difficult to keep up. You may also find, depending on how well the market’s doing, mortgage interest rates will fluctuate. This is really what you should be paying attention to, as it’s the interest that can really make or break a deal.

Your ending percentage will be based on your credit score, but you can estimate what you may qualify for by looking at what friends, family, coworkers, and acquaintances are paying for their homes. This is an important step because it helps cut down on any surprises when it comes time to apply for a loan.

Step 6

Get Pre-Qualified for a Loan

Don’t confuse “pre-qualified” with “approved.” Receiving pre-qualification simply means that the lender may provide you with a specific loan term based on very basic, rudimentary information. A pre-qualification has no bearing on the final approval, but it does let you know approximately where you stand.

You may find your pre-qualification is for a loan three times what you expected. Or you may get entirely different news that requires you to pivot and consider less expensive housing. After you’ve been pre-qualified and you find the home that appeals to you most, you can go for pre-approval, which is a deeper look into your financial situation.

Step 7

Tell Your Landlord

Through all of this, you have to remember you are bound by a contract with your landlord. Most leases require a 30-day notice if you plan on moving out, so now is a good time to start planning when that may be. You have to play a tricky game because you don’t want to tell them too early and then find out you can’t move. That could leave you in a situation where the landlord raises the rent, figuring you’ll be leaving at the end of the next lease.

Double-check your lease to make sure you provide your landlord with the agreed-upon notice of your departure.

Step 8

Make a Wishlist

This is one of the most fun parts of buying a home. Now’s the time to sit down and start considering what you want from your new space. What are your requirements for space and amenities? Knowing this makes it easier to narrow down what homes for sale in your community would be worth taking a tour of.

Be realistic with your wishlist and consider your price point when filling it out. You may want that second story, but does it fit into what you can afford?

Step 9

Determine What You Can Live Without

After you’ve made your wishlist, now you need to start thinking about the things you can live without. During your home search, you may be forced to make some concessions beyond even just the items on your wishlist. Is a kitchen with no dishwasher a deal breaker? Can you handle no on-site washer or dryer?

Your first home is rarely ever your dream home, but be sure you’re not giving up many of your necessities. You don’t want to move into a home you wind up disliking because it checks off nothing on your wishlist.

Step 10

Start Shopping for Your Home

At this point, you should be ready to really start exploring neighborhoods and finding a list of homes you’re interested in. Use many of these steps to locate properties that check as many boxes as possible while remaining affordable.

We’ll help you build a list of prospective future homes so you can finally leave renting behind and have a space of your very own.

Ready to Leave Renting Behind and Purchase A Home in Lillington?

Ann Milton Realty specializes in getting clients into the homes they want. We’re here to help you leave the renting life behind and enjoy the process of finding and moving into your first home. Review the steps above, skim through some of our resources, and prepare yourself for the sense of freedom that comes with home ownership.