Going from renting to owning your own home is an exciting step, but it also requires careful planning. Because it's a significant financial change, it's essential to fully understand how to navigate this transition before starting.

Here are five tips that will help you do just that!

1. Know Your Financial Situation Inside & Out

Before diving into homeownership for the first time, you must assess and thoroughly understand your financial standing. There are so many costs to consider, including potential:

• Down payment
• Monthly mortgage payments
• Closing costs
• Property taxes
• Private mortgage insurance
• Homeowners insurance
• Maintenance & repairs

A solid understanding of your financial health means you can better assess your budget and prepare for homeownership success.

2. Save for a Down Payment

One of the most significant changes from renting to owning a home is paying a sizable down payment. While 20% of the purchase price is ideal to avoid paying for private mortgage insurance, that's not a realistic option for everyone. Thanks to the number of loan programs and options available, you may qualify for much lower down payments, especially if you’re a first-time buyer.

Remember that a smaller down payment typically means a larger monthly mortgage payment. If you're in the beginning stages of thinking about going from renting to owning, start by saving for a down payment and familiarizing yourself with loan options.

3. Do Your Market Research

Research the housing market where you'd like to buy a home to get a feel for the number of homes on the market, price ranges, and competition. By doing your research and running the numbers, you help narrow down your search and better prepare for negotiations or potential bidding wars.

You may learn that inventory is low and competition is high in your research. Use that information to redefine your search area or ensure all your documents are prepared. That way, when it comes time to start house hunting seriously, you can submit an offer the second you find a home that suits your needs.

4. Get Pre-Approved

Speaking of serious house hunting, nothing says you're a serious buyer like mortgage pre-approval! Because the process requires a lender to review your financial history, health, and credit score to provide an estimate of how much they'd be willing to lend you, it can:

• Show you fully intend to buy a home
• Provide you with a realistic price range
• Give you a competitive edge

That said, only get pre-approved for a mortgage once you're ready to shop the market. Most pre-approval letters are only valid for 90 days.

5. Budget for Ongoing Expenses

Owning a home differs from renting in that you're now responsible for maintenance, upkeep, and repairs. Instead of calling a landlord to fix a leaky faucet or broken oven, you handle the unexpected expenses that arise.

But don't let that overwhelm you! You'll indeed be responsible for ongoing expenses, but you'll also be building equity now, something you can't do while renting. Equity is the difference between what you owe on your mortgage and what your house is currently worth.

As you pay your mortgage each month, you invest in your property. You can tap into that equity should you ever need help covering major renovations or expenses.

Transition From Renting to Owning With Help From JustChoice Lending

If you're ready for this exciting milestone, team up with JustChoice Lending today. We'll review all the loan options available and secure terms that fit your budget. Go from renting to owning a home of your own by requesting rates today!