How To Make The Transition From Renting Real Estate To Buying Real Estate
Buying real estate will probably be the most expensive purchase you make in your lifetime. It can be difficult to go from renting real estate to owning your own home. Here are a few things to keep in mind to help you make the transition as smooth as possible.
The first thing you are going to want to take into consideration is your employment situation. You want to make sure the position you are in is stable and is something you will be keeping for a reasonable period of time. With the economy the way it is today, no company is guaranteed to be there forever. But the more stable your job is the better.
The next area to focus on when buying real estate is your credit or FICO score. You can receive one report from each of the three credit bureaus for free each year. Your FICO score will be important in determining what interest rate will be offered to you. The better your score is the lower your mortgage interest rate will be. As for your credit score, you want to make sure all debt is paid and cleared off of your report.
As soon as you have attained your credit and FICO score, you can begin checking with your realtor or bank to determine the price range you can afford. Once you get the price of what you can afford, take this number back a little bit so you can live comfortably in a nice home. If you are paying too much for mortgage, you are not going to be able to afford food, car payments, insurances, and entertainment from time to time.
The last thing to focus on to help you make the transition from renting real estate to buying real estate as smooth as possible is having a down payment of 20 percent of the total mortgage. Having this down payment will help you avoid mortgage insurance, which is an additional amount of money added to your bank financing. It is best to avoid this cost if at all possible because it typically is quite substantial.
Making the transition from renting to owning can be a huge step. It is a much larger monthly payment, but it allows you to live the dream of having your own home. Take the information in this article into consideration to help you make the transition as smooth as possible.
Peter Vekselman-Real Estate Coach-Trainer
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