When most people go into the world to start a life of their own, they start by renting. Whether it’s renting a house, an apartment, or even just renting a room and sharing your living space with someone else this is a phase most people go through and look forward to while working their way up to getting their own home. Renting is a learning process all on its own, but transitioning from renting to home owning is also a learning process and you typically have no guidance on where to start.
While you still have a support system to fall back on as a renter, your lovely (or not so lovely) landlord, when it comes to becoming a homeowner you have to figure out a whole new range of things including how to do all those repairs and extra finances you didn’t really need to worry about before. Transitioning from renting to home owning can be stressful, to say the least, so here are some tips and tricks to help you navigate your way through it.
Where to Start When Deciding to Become a Homeowner
There are a ton of steps involved with transitioning from renting to home owning and most people have no idea where to start. Some helpful tips to explore include budgeting, working on your credit, creating a list of things you’re looking for in a home (your wants vs. your needs), and finding a realtor. To start, looking at your finances and working on budgeting will help you SO much. When it comes to buying a home and becoming a homeowner you have to look at what new appliances and expenses you may incur AND make sure you have enough money saved for down payments and closing costs.
Buying a house is expensive, even if you qualify for a home loan, and there are closing costs and other expenses associated with buying a home that you don’t typically think of.
Most realtors are going to tell you to have, at the very least, $5,000 in your savings account for closing costs but you will most likely need more. Your closing costs include things like inspection fees, your loan application fee, credit report fees (because depending on how long it takes you to close on your home your lender may need to pull your credit score more than once, however, let’s be honest, you’ll most likely have to get it pulled 2 or 3 times minimum just in the house-hunting process before you even put an offer on a home and are chosen), fees related to getting the title for your home, and escrow costs. Clearly, there are lots of fees involved so it helps to be as financially prepared as possible.
Another thing to work on is your credit. When transitioning from renting to home owning, the lowest your credit score can be in order to secure a home loan and buy a house is about 620. While renting does increase your credit score over time, some other ways to increase your credit score a little bit faster include getting a credit card and just using it for simple purchases. When you use it for everyday necessities (like gas) and keeping your spending rates on your credit card less than 33% of your total available spending limit, this can increase your score.
You can also contact your utility companies and see how often they update the credit bureaus, if you’ve been in good standing with them for at least a few consecutive months (no late payments/fees) that would be a good option to look into regarding giving a little boost to your credit as well.
Most new homeowners are also going to need new appliances and furniture like a washer and dryer, a lawnmower, and outdoor furniture. While you have to wait until you close on your house before trying to finance other products, like furniture and appliances, starting to budget before going through the process of becoming a homeowner helps a lot with figuring out what you can afford as well as what you can save money on. Some things to look at would be how much your water and electric bills might go up (or down); how much it is to transfer your services if that’s an option with the companies you currently use; what services you can cut out of your current monthly bills; and what services you’re going to need to add on.
Transitioning from renting to home owning is a very in-depth process, as it should be, but starting out already knowing the steps to take to make the process go smoother makes all the difference.
Read More: 5 Helpful Tips For Budgeting This Year
Finding the Perfect Home Location and Perfect Realtor
One of the hardest things to figure out while transitioning from renting to home owning is deciding what you need vs. what you want in a home. Do you want your neighbors close or far away? Is your ideal home location a flood zone or prone to natural disasters (like sinkholes or hurricanes)? Is there now, or has there recently been, any type of water contamination that affects the main waterway your ideal home is close to or exposed to?
How close or far away are schools and stores from your ideal location? These are some important things to consider when looking for a home, especially if you have kids, so starting out with a clear goal and prioritizing the things you want and need in a new home can help a lot when searching for your new home.
Another important factor in the process of transitioning from renting to home owning is finding a good realtor. As first-time home buyers, a lot of people rely on their realtor to know what to expect and to guide them throughout this whole crazy process while still being professional and making this experience go as smoothly as possible. Obviously, you can find billboards and ‘for sale’ signs with realtor information anywhere you go but how do you know that the realtor you choose is right for you?
One thing that can help is to outsource-talk with your friends and family about who they used and how their experiences were, and you can even ask if they know people who recently bought houses and may have references for you as well. Don’t go with the first person you come across. While first impressions do matter, not everyone has your wants/needs in mind.
Transitioning from renting to home owning is already hectic so finding someone that is going to look out for your best interests, and keep your wants and needs in mind, will help to give you a better idea of what some realistic expectations should be. Finding a realtor that will be there for you and guide you every step of the way while you’re transitioning from renting to home owning can make all the difference in how stressful this process is on you.
Read More: Surprising Factors To Consider When Buying A House
Transitioning From Renting to Home Owning
Congratulations on officially starting the process of transitioning from renting to home owning! You’ve found a realtor and your perfect home and now you’re looking for tips on what to do next. This is a huge step, not only in life but for you and your family as well, and you should be incredibly proud of yourself. So, what do you do next? You’ve started the closing process on your home and you’re kind of in ‘limbo’ waiting for the next steps from your realtor and lender, so here are some helpful tips for transitioning from renting to home owning as smoothly as possible.
- First, it’s time to start packing everything up! In the packing stage it’s important to make sure you label everything, there’s never a limit to how much you label. Nothing is more frustrating than trying to find something and having no idea where it is so one of the easiest things you can do to help yourself is to label everything and make sure that when it is time to start moving everything to your new house you organize it.
- It’s also helpful to put the miscellaneous and non-essential items first and leave all the important stuff for last so it’s fresh in your mind, you’ll know where to find it, and it’ll be easy to get to.
Read More: 5 Things You Didn’t Know You Needed to Rock a DIY Move
- The next step is making sure you are able to put your 30 or 60 day notice in to your landlord or leasing office. Transitioning from renting to home owning is not easy and the home buying process, once you go under contract, can take a minimum of 30-45 days if everything goes smoothly. Expect it to not go smoothly and do NOT put your notice in until you are about a week out from signing the closing documents. It doesn’t sound ideal (it definitely isn’t) but if anything goes wrong where your home/contract falls through, and you’ve already put your notice in, most places do not allow you to back out of your 30 or 60 day notice and you will most likely lose your current place to stay.
- It’s a precarious time to be in the middle of, but you really never know how things are going to go and this is another reason it is so important to budget and save money beforehand because literally anything can happen. During this time just keep checking with your realtor and when you’re basically in the underwriting stage you should be all clear to put your final notice in to your current landlord or leasing office.
- Another important step that will help you in the process of transitioning from renting to home owning is to get all of your services transferred to your new address and sign up for new services if needed. One of the easiest ways of doing this is by starting with filling out a change of address form through the post office (if in the U.S.). You can go to the U.S. postal service website and fill out the change of address form, as well as the date you would like the forwarding to start (this is typically your closing date), and the hard part is basically done for you (for the low price of $1).
- Next, figure out the basic needs-water, electric, and trash pick up. Your realtor should give you all the information you need regarding the water and electric companies that service the area your new home is located and you can typically find their websites and ‘start services’ paperwork to fill out online.
- For trash you may have to stalk your neighbor’s trash can for the number of the trash company that services your neighborhood (or, you could just ask your neighbor and get the awkward introductions over early). For all other companies, for example your cable and internet services, it should be as easy as calling your service provider and letting them know you’re moving and just want to change your address.
- One of the less stressful phases of transitioning from renting to home owning is helping your pets and kids learn your new neighborhood and where your new home is. The easiest way of doing this is by taking them on frequent walks around your neighborhood and mixing it up every now and then, don’t always walk the same way that way they get used to getting to your house from different directions. Over time they’ll be able to identify how to get back home and it also gives everyone some fresh air and a little bit of cardio in the process.
- Finally, you are no longer ‘transitioning from renting to home owning’ you are home owning! You’ve closed on your house and you’ve moved everything into your garage. So what’s the next step, what do you do now? Now, you can relax-you did it! This is a huge accomplishment and you should be proud of how far you’ve come. Take time to enjoy it! This time can be incredibly overwhelming because everything leading up to this has been extremely stressful and now you’re here.
- In a new place that’s actually yours, you have to unpack, reorganize, etc. So where do you start (again)? You take out the basics; unpack the bedrooms, bathroom(s), and kitchen boxes and when you’re ready work your way through what seems like an endless sea of boxes.
There’s obviously lots to do but take a moment to enjoy your new house. The process it takes to get here is stressful, to say the least, but now it’s over and you can take your time unpacking and making your house a home. Congratulations on becoming a new homeowner!
WANT TO READ MORE?
Check out Daily Mom’s House Hunting with Kids for more advice, tips, and tricks.
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