{"id":47725,"date":"2025-01-26T03:47:17","date_gmt":"2025-01-26T03:47:17","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/from-renting-to-owning-smart-financial-moves-to-make-homeownership-a-reality\/"},"modified":"2025-01-26T03:47:17","modified_gmt":"2025-01-26T03:47:17","slug":"from-renting-to-owning-smart-financial-moves-to-make-homeownership-a-reality","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=47725","title":{"rendered":"From Renting to Owning: Smart Financial Moves to Make Homeownership a Reality!"},"content":{"rendered":"


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Do you want to get out of the rent trap and invest in a new home? According to a recent CNN poll, the majority of current renters, about 86%, say they want to buy a home but can\u2019t afford one. Homeownership doesn’t have to be a distant dream. With the right financial moves, you can put yourself in a good position to buy your first home. Here are the steps to take that will put you on the path to homeownership.<\/p>\n

Jumpstart Your Savings Plan<\/h2>\n

If you’re in the beginning stages of planning for homeownership, creating a savings plan is essential. You may need to think of creative ways to cut expenses like getting a roommate, taking public transit, cutting back on discretionary spending, or starting a side hustle. All of these financial moves will help jumpstart your savings and help you afford homeownership while still paying rent.<\/p>\n

How Much Can You Afford?<\/h2>\n

If you’re serious about homeownership, getting pre-approved for a mortgage will help you better understand how much you can afford. This can help you narrow your search and create a realistic timeline for saving for a home. Next, you’ll need to calculate the total cost of owning a home so that you can make sure your timeline is appropriate for your budget.<\/p>\n

Calculate The Total Cost of Owning a Home<\/h2>\n
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Are you prepared for the upfront costs of owning a home? To prepare for homeownership, you may need a down payment of up to 20%, closing costs, and a good rule is at least 2 months of mortgage payments, including principal, interest, taxes, homeowner\u2019s insurance & any HOA dues. These costs should be less than 28% of your gross income. It’s also a good idea to set up a sinking fund for regular home maintenance.\u00a0You also will need to cover moving costs, which, even for a local move, can cost an\u00a0average of $2,500<\/a>.<\/span>\u00a0Once you calculate these costs, you can make sure that you are saving enough each month for your goal of homeownership.<\/p>\n

Work on Your Credit Score<\/h2>\n

One of the most important factors when applying for a mortgage is your credit score. Lenders will do a deep dive into your credit history. To prepare for homeownership, it’s important to understand things that may have a negative impact on your score. If you’re getting ready for homeownership, you should avoid any new credit applications, decrease your debts, and dispute any inaccuracies on your credit report.<\/p>\n

Understand The Best Type of Loan for You<\/h2>\n

While conventional loans<\/a> may require anywhere from 5%-20% down payment, there are other options for loans. Exploring all of your options can help you on your journey to homeownership.<\/p>\n