{"id":1809,"date":"2018-10-31T11:24:01","date_gmt":"2018-10-31T16:24:01","guid":{"rendered":"http:\/\/www.realtyhop.com\/blog\/?p=1809"},"modified":"2023-06-26T15:22:34","modified_gmt":"2023-06-26T19:22:34","slug":"renting-to-homeownership","status":"publish","type":"post","link":"https:\/\/www.realtyhop.com\/blog\/renting-to-homeownership\/","title":{"rendered":"Transitioning From Renting to Homeownership"},"content":{"rendered":"

The significant step from renting to owning a home requires careful planning and diligent saving. As a first-time homeowner<\/a>, you can build equity in a home which increases your long-term wealth. When your original investment in the property increases, you stand to gain a stronger return from a future resale. Saving a down payment and completing a home purchase counts as a major life achievement for many of us. If you might want to buy a home in the next year, it helps to understand some of the factors that could affect your rent vs. own decision.<\/p>\n

Location<\/h2>\n

Before you start your home search, evaluate the various pros and cons of renting vs. buying<\/a> in your local area. Some cities or towns in the country offer more affordable options for homebuyers. If you live in a high-cost housing market, like Glendale<\/a>, CA, or Miami<\/a>, FL, it could take 12-15 years<\/a>, according to RealtyHop<\/a>. If you live in a more affordable city like Detroit, you could save for a down payment in a little over two years, which helps to speed up your home purchase timeline. Within each individual housing market, you can search for more affordable neighborhoods. As a buyer, you should analyze the trade-offs when seeking a home in your budget, such as living farther from the city center in return for a lower cost per square foot.<\/p>\n

Your Future Plans<\/h2>\n

Buyers should have a thorough understanding of their career paths and family needs before making an offer on a home. Buyers looking to start or expand their family will need to consider more space, and buyers focusing on their careers may choose an area closer to work in exchange for the smaller size. Also, consider how long you wish to stay in your new home. Those who anticipate moving in the near future may have less strict requirements for their home than those who wish to settle down for many years. <\/p>\n

Unfortunately, buyer\u2019s remorse does exist and can happen for various reasons. You may realize that your commute takes too long, or the costs to keep up a new home may break your budget. In a robust real estate market, you might resell the home quickly, but home prices can shift for reasons beyond your control. After investing all the time and effort into attending open houses<\/a>, price negotiations, and moving logistics, you should feel confident in your final buying decision.<\/p>\n

Size of Home<\/h2>\n

Aside from considering your career trajectory, you should also take into account who will live in the home. If possible, you may want to buy the home you\u2019ll need in the future rather than move again in a few years. Do you anticipate the need for your parents or in-laws to live with you at some point in the future? Do you plan to start or expand your family? What about boomerang kids who\u2019ve left for college but might need to move home again after graduation?<\/p>\n

If you\u2019re looking for a more spacious home, RealtyHop analyzed price differences between two-and three-bedroom units to highlight some cities with the most affordable housing<\/a> for families. Cities like Philadelphia<\/a>, PA, Birmingham<\/a>, Alabama, and New Orleans<\/a> LA, topped the list for housing flexibility. In California, Sacramento<\/a> offers one of the most affordable housing markets for families.<\/p>\n

Interest Rates<\/h2>\n

Changes in interest rates<\/a> can affect a buyer\u2019s ability to afford a home. As rates rise, interest takes up a larger percentage of a homeowner\u2019s monthly mortgage payment. This means the buyer must use additional funds from their budget to cover the increased interest or offset the additional amount by paying a lower principal. When shopping for a mortgage, take note of the lowest available interest rates. To measure how different rates affect your housing budget and the overall amount you\u2019ll pay to purchase your home, you can plug the variables into an online mortgage payment calculator<\/a>.<\/p>\n

Budget<\/h3>\n

For homeowners, daily expenses, repairs, and maintenance costs can affect your household budget long after settlement. Renters will not cover the cost of maintenance, but may pay some utilities. However, homeowners must cover the full cost of service and repairs on their home. <\/p>\n

If you own a home and the toilet breaks, you can\u2019t call a landlord and ask them to send a plumber. Homeowners incur these added costs of repairs in addition to a monthly mortgage<\/a> payment. Prospective homeowners should consider budgeting for the following: <\/p>\n