Here are 5 good habits to start if you have vowed to buy a home in 2017!
Even if you’re just in the thinking stage, or months away from hiring an agent and touring homes, there are things you need to do now to make that dream happen. Being a huge purchase and life decision, it requires some preparation. Getting an early start will ensure a seamless transition from renting to buying, both financially and mentally.
Habit No. 1: Automate your down payment savings
“If you’re trying to squirrel away the recommended 20% down payment, that works out to about $40,000 for a $200,000 home. That’s a huge chunk of cash, so unless you’ve been the recipient of an inheritance or have recently won the lottery, you can never save too early or too much.”
“The down payment takes more money than 99% of people plan for,” warns Joshua Jarvis of Jarvis Team Realty with Keller Williams Realty Atlanta Partners in Duluth, GA.
So a great way to start is to set aside a small amount each month into a separate savings account “If you never see the cash, you won’t spend it.” comments Realtor® Marcia Goodman with Re/Max Gateway in Gainesville, VA.
“And you don’t have to put down the full 20%, either—there are other options. But it’s best to save as much as you can.”
Habit No. 2: Build your credit history and keep it clean
Getting a mortgage means proving to lenders that you’ve paid off past debts and are keeping on top of your current credit cards, payments and loans. However, don’t steer clear of credit altogether, keep using your credit card just don’t put too much on it at once. And if you’ve never had a credit card or a bank loan, you won’t have a credit history, which is also a negative. Get a small credit card, pay it off every time you use it. So once you have credit established pay all your bills on time—this is super important.
Habit No. 3: Practice living on a budget
It’s a common thought that owning a home is pricier than renting. This is not necessarily true. Of course it depends greatly on your area, so make sure to compare the costs of renting vs. buying near you. Here is where planning really comes in…..if you expect your mortgage to take a bigger chunk out of your wallet than your rent, create a budget that factors in your new reality so you can get used to living on less disposable income, suggests Kevin Lawton of Coldwell Banker Schiavone & Associates in Yardville, NJ.
Great tip: “Downsizing your budget early also means you’ll be able to save more for your down payment, pay down debt, or save for furniture for your new home.”
Habit No. 4: Get your handy on
Not practiced on the art of “handy-man”….Being a renter does not grant you this flex of your muscles because when there is a problem —leaky faucets, broken boiler—they are your landlord’s responsibility to repair. HA! Once you own, you will be able to flex those muscles, which means you should probably know a handyman thing or two.
“Consumers thinking about buying a home should learn the basics of property maintenance and general ‘handy habits,’ since maintenance is an ongoing effort for homeowners,” says Evan Harris, co-founder of SD Equity Partners in San Diego.
““Knowing how to fix basic home issues such as electrical shorts, repair drywall, and tackle basic plumbing problems will save thousands of dollars in the future,” he says, noting that it’s smart to learn how to fix these issues before you’re scrambling around a dark kitchen where you blew a fuse.”
Habit No. 5: Prepare to pounce
The more you know the better. It is advised that buyers spend time getting to know the real estate market before they’re ready to buy.
“It’s a good habit to start browsing homes online to get a sense of what is available in your price range and the neighborhoods and amenities you’ll realistically be able to afford,” Lawton says. “This can help avoid disappointment when it comes time to really look.”
Now that we’ve gone over a few good habits to start your journey to homeownership give me a call here at ReMax at 301-252-0389 if you need any further advice or if you are ready to take a look at the market!
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