What You Can Do Right Now To Prepare for Homeownership
As rent prices continue to soar, many renters want to know what they can do to get ready to buy their first home. According to 2021 data from ApartmentList.com, "The first half of 2021 has seen the fastest growth in rent prices since the start of our estimates in 2017. Our national rent index has increased by 11.4 percent since January . . . .”
Those rising rental costs may make it seem impossible to prepare for homeownership if you’re a renter. But the truth is, there are ways you can – and should – prepare to purchase your first home. Here’s some expert advice on what to do if you’re ready to learn more about how to escape rising rents.
Start Saving (Even Small Amounts) Now
Experts agree that setting aside what you can (even smaller amounts of money) into a dedicated savings account is a great starting point when it comes to saving for a down payment. As Cindy Zuniga-Sanchez, Founder of Zero-Based Budget Coaching LLC, says:
“I recommend saving for a home in a ‘sinking fund’ . . . . This is a savings account separate from your emergency fund that you use to save for a short or mid-term expense.”
Zuniga-Sanchez adds saving in smaller increments can help make a large goal, such as saving for a down payment, achievable: “Breaking up your goals into smaller bite-sized pieces by saving incrementally can make a large daunting number more manageable.”
Assess Your Finances and Work on Your Credit
Another tip experts recommend: take a look at your overall finances and credit score and find ways to reduce your debt. If you’re not sure what your credit score is, there are numerous online tools that can help you check. If your score is below average, don’t fret. Remember that an average means there are homeowners with credit scores both above and below that threshold.
If you find out your score is below the average, there are several ways to improve your credit before you apply for a loan. HUD recommends reducing your debt as much as you can, paying your bills on time, and using your credit card responsibly.
Start the Conversation with Your Agent Today
Finally, it’s important to talk to someone who understands the market and what it takes to become a first-time home buyer. That’s where we come in. A trusted agent can help you navigate your specific market and talk you through all the available options. Having the right network of real estate and lending professionals in your corner can help you plan for the home buying process as well as determine what you can afford and how you can get pre-approved when you’re ready.
If you’re planning to be a homeowner one day, the best thing you can do is start preparing now. Connect with us today and we'll put you in touch with a top-performing agent who will set you up for success on your journey to homeownership.