If you’ve decided to transition from renter to buyer, congratulations! Homeownership is a big step toward financial stability. As a homeowner, you’ll start to build equity. Over time, equity increases if the property value increases or you pay down the mortgage loan balance. As equity increases, you can put your assets toward other things, such as a second home, retirement, and more.
Here are some key considerations to factor in when transitioning to homeownership.
Preparing for Homeownership
If you’ve determined you’d like to transition from renter to buyer, there are ways you can prepare for the home buying process even while renting. Here is how you can start the transition today.
- Build Your Credit Score: Most first-time buyers need to get a mortgage. Your debt-to-income ratio and credit score are among the things lenders consider when deciding whether to loan you money and at what interest rate. The higher your credit score, the more options you’ll have on the types of mortgages you qualify for and on the interest rate you’ll pay. This is why it’s important to build your credit before applying for a mortgage.
- Build Your Income: Lenders consider your debt-to-income ratio to determine whether you can afford to make the mortgage payments, which is why you’ll need a steady income.
- Save Your Money: Buying a home involves some degree of upfront money, including earnest money, a down payment, inspection costs, and an appraisal, among other costs. Because of this, you must build your savings before becoming a homeowner.
Transitioning to Homeownership
Once you’ve prepared for homeownership and have calculated how much you can afford, it’s time to begin your home buying process.
- Choose a Solid Real Estate Agent: A good real estate agent will help make the home buying process much easier. They can help find available homes that fit your budget and preferences, and they can be valuable during the negotiation and closing process.
- Choose Your Mortgage: Choosing a mortgage is a long-term decision that deserves extra attention. It’s important to take into account the down payment and eligibility requirements each type of mortgage carries. If at any point you need to refinance that loan, Monarch Title Company can help you close.
- Choose Your Title Company: As a customer you have the choice to select the title company you want to use, you are paying the fees, so by choosing Monarch Title we will work with you and everyone associated with the home buying process to give you peace of mind. As your closing agent, we will ensure all the documents are signed and filled out correctly before closing so that things can go as smoothly as possible. Monarch Title also makes sure that all the money involved is transferred correctly and safely. At Monarch Title Company, we strive to make your closing a smooth process so you don’t have to worry about a thing when it comes to the final steps of your transition to homeownership.
Still have questions about the transition from renting to home-owning? Contact Monarch Title Company today!