In a recent study by Fannie Mae, it was reported that 90% of renters wish to buy a home for the following reasons: to have control over their living space, for more privacy and security, to save toward retirement, and to raise a family. Whatever reason you may have, take a look at these 5 “Quick Tips” in order to prepare yourself to transition from renting to buying:
1. Location, Location, Location! This seems like an obvious place to start. If you are investing a lot of money into a home, you want to make sure that the area is where you want to stay for an extended period of time. Figure out what is most important to you when choosing a location. Are great school systems top priority? Are housing costs at the top of your list? Try Boston.com’s Dreamtown Finder to get a list of Massachusetts towns that may just fulfill your ‘dream’.
2. Choose a Realtor. Although you may have a close friend or family member that is in the real estate industry, try going with a realtor that is most familiar with the area you are looking to buy. They know the area best, and in an extremely competitive market it’s good to have an experience negotiator on your team. It’s also good to have a realtor that is part of an office to get the first scoop of the houses in their office that might be coming on the market.
3. Start Saving $$$. Keep in mind that you will probably need approximately 20% of your mortgage as a down payment so start saving well in advance. Also, create a ‘mock budget’ of what your monthly expenses would look like with an estimated mortgage payment. Don’t forget to factor in things such as groceries, entertainment, gas, emergency expenses, etc.
4. Get Pre-approved. Research different lenders in your area and shop around for the best rates. Once you have a pre-approval letter it will give you a leg up when it comes to negotiating a price with sellers, as opposed to someone that does not have pre-approval.
5. Sign up for a First Time Homebuyer Seminar. Get a more in depth explanation of the buying process by signing up for one of these courses. This will help you answer any of the questions that may still be holding you back from starting the buying process. Most are complimentary and given by real estate offices or lenders in your area, so it is also a great chance to meet local agents and mortgage brokers. Stay tuned for the date of Century 21 Celli’s First Time Home Buyer Seminar!