Going From Renting To Buying
Pretty much everyone dreams of owning a home one day. For many people, it takes years of saving to finally put down a deposit for a home, then more years paying off the mortgage. While there is a lot of time and money involved, there are a few things that can quicken your path to buying a house, and do it affordably.
Unless you are buying your house in cash, you will rely on lenders to finance your purchase. No lender will be willing to work with you if you do not have a verifiable credit history, or the history is littered with bad debts.
The first step is to obtain a copy of your credit history and check out your ratings. If the history is not long enough, sign up for one or two credit accounts to build it up. If you have a bad rating, work with your creditors to pay off the debt and repair your credit ratings.
Learn Home Ownership
Being a homeowner involves more than just paying off the mortgage. There are costs and tasks involved in keeping the home in good shape, and fulfilling various legal requirements. You will need to landscape to give your home a personal statement. There will be repairs and maintenance needed from time to time, and major home improvement projects like kitchen remodeling will cost you hundreds if not thousands of dollars.
You will have to meet legal requirements in taxes and community fees where they are applicable (condo owners). To safeguard your home, you will need to take up insurance, which premiums will be pegged on the value of your home.
Consider Your Financing Options
Typically, you will need to put down 20% deposit for the house. If you are not able to raise this amount, you will have to take out mortgage insurance. The good thing is that many lenders are willing to lower your deposit if you have mortgage insurance. This can go as low as 5%.
Learn About Taxes
There are different taxes to be paid by homeowners. Fortunately, as a homeowner, you can claim deductions on these taxes if you are paying property taxes and mortgage interest. This makes owning a better choice when it comes to tax matters.
Rent vs. Buying Costs
In the end, it all comes down to affordability. Can you afford to take out a mortgage for the home you want, or would it be better to continue renting while you save more? Consider your financial position according to the kind of home you have in mind.