Articles Tagged "home buying"

The Watson Blog Home
August
2

Florida Architecture

If you're planning on buying a Florida home or upgrading to a different Florida property, you'll find that there are a lot of architectural styles to choose from. Our real estate agents understand that having so many options can feel overwhelming, especially if you aren't sure exactly what you're searching for in a home.

We recommend learning about the different architectural options so that you feel more comfortable when you're shopping for a home. Here are some of the most popular Florida home styles. 

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July
18

Closing Process

You're ready to start the process of searching for your next home, but you're a little apprehensive about all the steps associated with the process. One stage that our real estate agents suggest you learn about is the closing process.

The closing process is the last major stage of buying a home before you're officially a homeowner. Here's what you should know.

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June
21

Florida Real Estate

Record home prices, rising interest rates, and low inventory have created an incredibly tough environment for buyers. It's still entirely possible to land a property despite the current market conditions. Buying a home in a hot seller's market just requires some extra work, time, and a lot of patience. 

Our real estate agents have been working closely with buyers to navigate the complexities of this unprecedented market. Here are 7 tips we frequently share with our clients:

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January
14

Whether it's your first time buying or selling a house or it's your fifth, you'll likely have lots of questions about the process. We understand that, which is why we're answering some of the most frequently asked questions about the home-buying and home-selling process. Read on to get the answers you seek!

Buying a Home

Should I work with an agent?

Yes! When searching for a home, it's important to know what you want. The right agent will help you determine must-haves and deal-breakers, as well as educate you on the communities you're interested in. Your agent will also help you navigate the complexities of the home-buying process. They're the expert, after all!

Should I go to the bank before starting my house search?

Getting pre-approved before starting your house search can be very helpful. By measuring factors like income, credit, and assets, a lender can determine what type of loan best suits your needs and how much home you can afford. Not only will you know your spending budget, it can also give you an upper hand as a buyer because it shows sellers you're serious about making a purchase.

How many houses should I tour?

As many as it takes until you find the perfect home for you. Everyone's needs, wants, and deal-breakers will be different, and you want to avoid settling for a house you'll dislike after a few months. Even if it takes time, it's worth the extra effort.

Do I need money for a big down payment?

Not necessarily. Today, more loan options and homebuying programs exist, giving buyers a larger variety of approaches to buying a house. While some people may still want to complete a large down payment, it is absolutely not vital to purchase a home. In fact, the average first-time buyer only puts 6% down, and many loans and programs available to first-time buyers require even less than that.

How long will closing last?

After negotiations have settled and your offer is accepted, the loan process and title work begin. Inspections and other walkthroughs will be completed as well. Most closings last 30 to 45 days.

 

Selling a Home

Should I sell on my own or with an agent?

You've probably heard from one person or another that going the For Sale By Owner (FSBO) route is optimal as it will save you money that you would otherwise spend on commission fees. However, the benefits of listing, marketing, and exposing your home to potential buyers an agent provides are often worth the commission fee.

What's more, you may end up spending less money by selling with an agent. A typical home sale process that requires lots of time and effort likely won't net you much savings at all if you go it alone.

When should I put my home on the market?

This is the first of many steps where an agent's expertise will help you make a decision. When there are fewer available homes to purchase to meet buyers' demands, you get a seller's market. Each home for sale becomes a hot commodity in this sort of market.

There's no truly bad time to sell, necessarily. Even in a buyer's market, your home will still draw attention so long as it's promoted properly.

Should I make any changes to my home before selling?

Definitely! Do a deep clean, make necessary repairs and replacements, organize cabinets and closets, declutter and depersonalize, and spruce up your home's curb appeal. Be careful about spending too much money on major repairs and renovations, however; you may not make back what you spent in the sale.

How should I price my home?

Determining your home's value can be tricky; setting an accurate sale price can be even tougher. Your agent will help you assess your home's value by analyzing other similar homes in the area that have sold. A home inspection will also help to paint the picture of your home's value.

Setting a sale price is a delicate art. Price it too high and you risk pushing buyers away. Price it too low and you might raise suspicions in buyers' minds. Again, your agent will help you find the sweet spot and price your home favorably.  

 

Still have questions about the home-buying or selling process? Contact one of our expert agents to have your questions answered.

October
27

Your first stab at buying a home involves a lot of emotions. Excitement, happiness, anxiety, fear, joy, sadness; you're sure to feel at least some combination of these and more during your first homebuying experience.

Real estate agents know this, and they're often prepared for it. "First-time homebuyers can be scared because they've never experienced this situation before," Michael Blazek, Managing Broker of Watson's Atlantic Beach office, says. "But working with them is fun because they're usually very excited."

We understand just how daunting buying your first home can be. That's why we got some of our brokers to come up with their own expert advice for first-time homebuyers.

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October
15

One of the first steps to buying a house is securing a mortgage loan. But how do you know who to trust as your lender? It's a big decision, and more goes into it than simply finding the best loan terms. Read on for our tips on how to choose a mortgage lender.

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September
30

For most of us, a life lived mostly inside the walls of our home became the norm for at least a year. Lots of things changed; grocery store trips became deliveries, intense hand-washing sessions occurred multiple times a day, and empty guest rooms became home offices.

It makes sense then that homebuyers' preferred features have shifted in response to the changes they've experienced. Point2 Homes examined 43 million words from more than 640,000 listings across the United States, then compared their findings to a study of the same nature in 2019.

Examining the most popular home descriptions words, phrases, and features reveals a lot about how buyers' tastes have changed.

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August
27

After more than a year of low housing inventory, skyrocketing prices, and intense bidding wars, the real estate market appears to be tempering a bit. While inventory is still sparse (though improving) and prices continue to appreciate (though at a less rapid pace), there's plenty of reason for optimism if you're looking to buy. Here are a just a few reasons why it's a good time to buy a house.

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August
23

Vacation Home Florida

Do you wish you had a place you can go to relax and have a good time? A place all your own, by a beautiful beach, where you can get away for a few weeks or months each year and swim, sail, surf, and bask in the Florida sunshine.

Our real estate agents have helped turn that dream into a reality for many families.

But before you buy that vacation home you've been dreaming about, there are a few things you need to keep in mind.

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July
28

Have you ever wondered what style of house represents your personality? There are so many home types to choose from, you should know which one fits you best! Take a look at these five popular home styles to get an idea for the aesthetic and functionality that match your unique personality when you're ready to purchase your next home.

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June
22

The big day is almost here. You got preapproved for a favorable mortgage. You scoured listings for weeks – maybe even months – to find the perfect house. You submitted an offer and the seller accepted. And now, so close to the finish line, it could all be for naught if you make one of the mistakes we're going to talk about. Instead, stay informed with your real estate agent and, above all else, don't do these things before closing on a new home.

Apply for New Credit

There is quite possibly no worse time to open a new credit card account than before you've closed your home purchase. Think of your mortgage preapproval as a snapshot of your credit, debt, and income situation at that moment. Opening a new line of credit alters that snapshot and could give you a lower credit score, causing your lender to reevaluate everything.

Buy a New Car

We don't necessarily mean new as in brand new – though it of course applies – but rather any new vehicle that is new to you since you were preapproved. That new set of wheels likely comes with a large loan of its own, and trust us, your lender will not like that.

Start a New Job

Another thing you shouldn't do before closing is starting a new job. A reliable source of income is critical to securing a mortgage loan; embarking on a new job brings with it inherent questions of stability and security. If possible, it's best to wait until after closing to pursue the fresh start you've been craving.

Use Credit Cards Excessively

Putting more and more purchases on a credit card increases your credit usage, which can have repercussions on your loan eligibility. What's more, it's a good idea to make sure your bills are paid up or at least not delinquent. And while you're at it, be on time with all your payments until your loan is finalized – the last thing you want to do is send up a red flag to your lender by way of late payments.

Make Any Big Purchases

This could be a tricky situation to avoid before closing. Furniture, appliances, and other essentials will be calling your name, and while some of them may feel like necessary purchases, they're also expensive investments. Paying for them upfront could eat into the money you've saved aside for closing costs – do NOT do this! – while financing or using layaway adds another line of credit to your name.

Make Any Unexplainable Deposits

Your lender will know what your income typically looks like, so an unexpected deposit of, say, $3,000 will create unease on their end. If you have a paper trail, that helps. Your best bet is to just wait until after closing for big, out-of-the-ordinary deposits.     

Co-Sign a Loan for Someone Else

It's just a favor for a friend or family member, right? Wrong. Co-signing a loan for someone else makes you responsible for said loan. Should the borrower fall behind on payments or default, you're the one the lender will be coming after.

It's always wise to consult with your agent whenever you have any questions about what you shouldn't do before closing. Find a Watson agent when you're ready to start your home search.

June
18

Bidding War

After a long search, you've finally found the house you want. The only problem is, someone else wants it too.

Bidding wars are common, especially when interest rates are low. If you're not careful, they can drag on forever and cost you much more than you were initially prepared to pay - if you win the war at all. Our real estate agents can help you hold your own when there are multiple bids. Here are a few tips for making it through a bidding war and coming out on top.

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February
10

the value of a real estate agent

When buying or selling a house, what's your top priority? Probably to make the most money if you're selling or get the best deal if you're buying. As a result of being money-conscious, you might think you're better off pocketing what you would pay in commission fees for a real estate agent. If you go that route, however, you're likely doing yourself a disservice. The value of a real estate agent comes from the often-overwhelming amount of work they take off your plate when buying or selling your home.

Buying a Home

House-shopping is at once very exciting and exhausting. A real estate agent can help alleviate many of the exhausting factors. They'll comb through new listings – across a wide network you wouldn't otherwise have access to – in search of homes that match your wants and needs, weeding out the pretenders and bringing you the contenders.

The value of a real estate agent becomes even more apparent when it comes time to make an offer. They'll help you prepare a formal offer as well as guide you through any negotiation that may come after to ensure you get a good deal. After the offer, a real estate agent will guide you through inspections and oversee any repairs deemed necessary.

Selling a Home

What do you need an agent to sell your home for – you know it best, right?

Well, when selling, objectivity is your best friend. A real estate agent will value your home with an honest eye, one that accounts for market value and other factors to ensure your asking price isn't too high. They'll also help you stage your home so that it makes the best impression to potential buyers.

Your agent will be invaluable when it comes to marketing your home to those buyers. They can get your home exposure on multiple websites and listing services, as well as use tools like social media to get even more eyes on the property.

Again, you'll truly recognize the value of a real estate agent when you start receiving offers. Your agent will review offers and keep you informed through every step of negotiation, ensuring you don't get caught with a stale deal.

Picking the Right Agent

Ultimately, the real value of a real estate agent comes in finding the right one. Working with an agent you gel with and who understands your wants and needs is critical. But once you secure the right agent, you'll truly understand why it's worth it.   

September
23

A seller's market occurs when there are more buyers than there are homes for sale. As COVID-19 has impacted our daily sense of normal for the majority of this year, it's also created a seller's market. And as you might imagine, a lower inventory can make buying a home in a seller's market challenging. But it's not impossible! We're here to help you make the right moves so that you're not left out in the cold (figuratively, of course). Here's what you can do to make buying a home in a seller's market a lot easier.

Choose the Right Agent

Navigating a seller's market as a buyer is risky business on your own. Securing a sharp, experienced agent to be in your corner will alleviate much of that risk.

Get Pre-Approved First

Pre-approval not only gives you the security to make a move fast – a must in a seller's market – but it also gives the seller confidence that you mean business. That goes a long way.

Don't Wait to Make Your Best Offer

In a buyer-slanted market, it might be more attractive to offer something lower than the asking price and negotiate from there. But when the market favors the seller, you're much better off making your best offer up front. You don't want to invite competitive interest by submitting a lower offer.

Your Best Offer Still May Not Be Enough

Despite leading with your best offer, you still may need more to secure the purchase. Buying a home in a seller's market means other buyers will be in the hunt for the same home. Prepare with your agent to continue bidding if your first offer isn't enough.

Make Quick Decisions

Seller's markets require buyers to think fast and act even faster. Your favorite listing today could be off the market tomorrow. You should of course still do your due diligence; you want to be decisive but not reckless. If you fall in love with a home, don't be afraid to make a move.

Be Flexible

Flexibility matters in a seller's market. For one, you can make your offer even more attractive by agreeing to terms that are convenient for the seller. Maybe there's a piece of furniture they don't want to take with them. Let them! It might be a bit more work for you after closing, but it might make closing the home that much easier. You have to be flexible with your own wants and needs, too. In a buyer's market, you might have more wiggle room to find a house that checks every box on your wish list. But buying a home in a seller's market could mean compromising on certain things. Maybe the style isn't quite what you love, or maybe the location is a little off from where you'd prefer. If these are must-haves, then by all means wait. But if you can determine those factors that aren't as important, you'll have a less stressful time.

It May Take More Than Money

After a job interview, you may send a personal handwritten note to your interviewer as a follow-up and reaffirmation of your interest. The same gesture can make a difference when buying a home in a seller's market. Let the seller know the home is as important to you as it is to them.

May
29

Let's face it: buying a house can be hard. Even if you've done it a few times before, the purchasing process is so complex that little details can easily be lost in the shuffle. That's why, in addition to having a great real estate agent by your side, you should always ask lots of questions before committing to a new home. Here's what to ask when buying a house.

How much house can I afford?

We've talked a lot about budgeting for a home purchase on this blog, so we won't dig too much into this question. Suffice it to say, a thorough examination of your finances is a critical early step in your house hunt.

What are my total monthly costs?

Your monthly payments in a home are likely to include more than just mortgage and utilities. Things like property taxes, HOA fees, homeowner's insurance, and more are important to remember when putting together your monthly budget. Check with your agent about additional fees like these once you've found a home you like.

What's included in the sale?

Of course you're buying the house itself, but what about what's inside? Are you getting a full suite of appliances and light fixtures, or is the seller taking them? Your agent can help you firm up what you're getting as part of the purchase, which will help you make more informed decisions about what you need.

What's included in the seller's disclosure?

The seller's disclosure details many things, including the condition of various structural items, potential infestations, and other possible health and safety hazards. Your agent will help you review the seller's disclosure for important items like the status of the home's roof, walls, and foundation, hazards like mold and lead paint, and any repairs that have been done to the home in the past.

Why are they selling?

The seller could be putting their house on the market for any number of reasons – relocation, downsizing, new job, etc. But it could also have to do with the neighborhood, or something relating to the house itself. Occasionally your agent may have insight as to why the seller has put their home on the market. Determining these motivations not only allows you to be more thoughtful in your purchase, but it could give you an edge in negotiating if they're trying to sell fast.

How long has the home been on the market?

A long shelf life typically happens when a home is listed at too high a price point initially. Even as the pricing adjusts, the home could still consequently stay on the market. That can scare away buyers, as they fear something must be wrong with the home that can't sell. However, that could also prove beneficial for you as the owners may be motivated to reach a deal quickly.

How old are the appliances and other major systems?

Is the air conditioning unit on its last leg? Are the kitchen appliances (the ones that are staying, anyway) ready to give out? Are the bathroom sinks one clog away from a full-blown disaster? The answers to all these questions and more are crucial to your purchasing decision. Some of this info may be in the seller's disclosure, while others will be uncovered by the home inspector. For many of the home's major systems, you can ask for a home warranty that will cover costs should they break.

What's the neighborhood like?

You won't get a true feel for a community and its residents until you've lived there yourself, but you can get a solid idea just by driving through the neighborhood and speaking with folks you see out and about – they may tell you things the selling agent might not. Visiting the community at different parts of the day can reveal a lot, too, like how many kids are outside playing and how busy common areas like dog parks, pools, and playgrounds can be.

Is the home in a danger zone?

Depending on the area, it can be easy to assess your new home's potential risk level for things like flooding. Beachfront homes are pretty high risk for hurricane damage, for an obvious example. Still, it's good to ask for homes that are in a less obvious risk zone for natural disasters. Florida homes are often required to carry additional insurance for flooding, so it's important to know. Fortunately, you can check for yourself simply by entering the property address on FEMA's flood map service center.

May
15

Whether you're a first-timer or you've purchased a home before, there comes a pivotal point when considering a new home where you have to ask yourself: Are you actually ready to buy? At first the answer might seem simple, but it's not a mere yes or no. Multiple considerations should factor into your answer, from debt and income to down payments and closing costs. You're not going this alone, though. We've prepared this guide to help you make sure you truly are in a good position to buy. So, are you ready to buy a house? Read on to find out.

Do you know how much house you can afford?

As we mentioned in our home-buying budget guide, it's important to go into your home-shopping experience with a firm idea of how much you can afford on housing each month. Getting pre-approved for a mortgage loan can help, but it also doesn't mean you have to spend the full amount for which you get approved. Most personal finance experts recommend spending 30% or less of your monthly income on housing. However, remember that your monthly housing expenditures include more than just a mortgage payment. Utilities, property taxes, HOA fees, and more could add to the total, so you'll need to keep those in mind when preparing your budget.

What's your debt situation like?

Do you have outstanding credit card debt? What about student loan debt? Not only can debt leave a bad mark on your credit score (more on that below), it can also severely hamstring your efforts to save and pay for a new home. Beyond traditional debt, what about a car loan? Or perhaps a different kind of personal loan? Of course there are financial circumstances that are unavoidable (like medical bills), but they'll affect your home search all the same. If you still have a significant amount of debt to pay off, that should be your financial priority.

How's your credit score?

Your credit score will directly impact the terms of your mortgage. Generally speaking, a score of 740 or more will net you better rates. You should aim to pump up your score as much as possible before seeking mortgage approval.

Are you prepared for a possible down payment?

You don't necessarily need to prepare for the typical 20% down payment, especially if it's your first time – most first-time buyers put an average of 7% down. In fact, many loans and programs require even less. So the amount you spend on a down payment will vary, but it's still a payment for which you should prepare. The last thing you want when buying a home is a surprise.

Will you have enough money left after closing?

If you're saving up for a $1,000 TV, it makes sense to stop saving at $1,000. The same cannot be said for purchasing a house. If your bank account bottoms out after closing, you're in a bad spot. You'll want to have an emergency fund that can keep you afloat for a few months. It's also a great idea to save up enough to cover your housing costs for at least six months. Beyond emergency planning, there will be things you have to spend money on in your home. From repairs to buying those random items you didn't think of before, you'll continue to pour money into your house after closing. Prepare accordingly.

What's your future look like?

We're not asking you to predict the future (but if you can, we'd love to know). Rather, where do you see yourself in five years? If you're uncertain about your current job or don't plan on staying in the area for a couple years, you probably aren't ready to leap into a new home. Buying a house is a major investment, and one that's better done on top of firmly planted roots. Once you've found security in a city and job you love, you'll be ready to start shopping.

April
2

In these uncertain times, Watson remains committed to your real estate needs. We've taken our home-buying and selling processes digital to offer you the same legendary quality of service you're used to while adhering to social distancing practices. Buying or selling a home digitally is easy; read on to find out how.

Buying a Home

1) Finding an Agent

If you haven't already partnered with a real estate agent, you can easily find one via our website. Once you've found someone you like, you can consult with them via email, phone, or text to talk about your home wish list, areas in which you're looking, and more.

2) Getting Pre-Qualified

Applying for a loan online is simple. Just create an account with Watson Mortgage Corp. and get started. 15 short minutes later, you'll see how much you qualify for!

3) Touring Properties

Your agent will send multiple properties to review online. Once you've narrowed down your favorites, your agent can arrange a virtual tour via video. If you and the seller are comfortable with it, you may still be able to arrange an in-person tour.

4) Making an Offer

A written offer containing details like financing method, cancellation terms, repairs, and more will be prepared over the phone or via email and will be submitted to the seller digitally. If further negotiations are required, they will also be handled over the phone or via email.

5) Closing

We've altered our closing process to reduce the number of parties needed at signing. Once all terms are agreed upon and necessary paperwork has been filed, signings will occur in a staggered fashion – usually the seller goes first and then the buyer. And just like that, you've bought a house safely and conveniently!

Selling a Home

1) Finding an Agent

As with finding an agent when buying a home, you can easily find an agent you like via our website. Once you've secured an agent, you'll consult with them over phone, email, or text to discuss your selling goals, proposed timeline, and more.

2) Prepping Your Home to Sell

If you're comfortable with it, your agent can visit your home to give advice on which projects you should tackle before putting your home on the market. You can also organize a video call if you'd rather stay digital.

3) Listing Your Home

Your agent will consult with you via phone, email, or text to set a reasonable asking price that will give your home the best chance to attract buyers. They'll email you a comparative market analysis that tracks the selling price of similar homes in your neighborhood to help determine your home's value. Once you've settled on a listing price, your agent will consult with you digitally to develop a customized marketing strategy for your home.

4) Showing Your Home

Virtual tours make showing your home during these times easy and safe. Your agent will perform a walkthrough of your house, filming the entire tour with their smartphone or camera. The virtual tour can also be performed live via Facetime or another streaming service. Virtual tours are the recommended way to show your home during these times, but in-person showings can be offered to buyers who are pre-approved and qualified to buy, and who have given their intent to buy the home.

5) Receiving Offers and Closing

Your agent will submit offers to you digitally via email and discuss the terms of the offer with you over phone or email. Any further negotiations will be handled the same way. Once you've accepted an offer, your agent can work with you to schedule independent inspections and appraisals with respect to your schedule and comfort level. After all requirements have been met, your agent will have you sign the final sales agreement in a staggered fashion – seller first, then buyer.   If you have any further questions about buying or selling a home digitally, feel free to contact your real estate agent directly or contact us here.

February
12

So you're ready to buy your first home. Great! Home ownership is a unique gift, one that will continue to give back to you in time if you treat it right. As such, however, it's a major investment that can only come from careful planning, dutiful research, and a disciplined budget. Completing such a large purchase may seem daunting, but we're here to show you how to budget for your first home.

Plan Ahead

Saving for a house isn't the same as saving for a new couch or even a new car. You'll need as much preparation as you can get, so the sooner you start looking, the better. Have a look at homes for sale in areas you're interested in as early as a couple years before you're ready to buy to get an idea of the price range. In addition to pricing, browsing early can help you determine your priorities. How big of a house do you want? Is location super important? Are you adamant on a pool even if it costs more? Figuring out your must-haves will also help you determine how much you could potentially spend.

Set a Budget and Don't Budge from It

Once you have a general idea of what you're looking for in a home, you can start setting up a proper home-buying budget. Assuming you don't already maintain a budget, a good starting point is to add up all your monthly take-home income and subtract from that total all your monthly expenses. Let's say your monthly take-home income is $6,000. Your non-housing monthly expenses come out to $3,000, leaving you with $3,000 each month. However, it would be a folly to use $3,000 as a measuring stick for how much home you can afford. Generally, you should aim to keep your housing costs at 25% of your monthly take-home income. In the above example, you'd want to keep your mortgage payments at $1,500, give or take a few hundred dollars.

Consider the Additional Costs

For most renters, rent and utility payments are the only recurring housing costs each month. However, when you purchase a house, you'll have to consider additional costs on top of your monthly mortgage payment. Depending on the condition of the home you're purchasing, you may need money for repairs or renovations.

A maintenance fund is another good idea – even routine fixes can pile up when you no longer have a maintenance crew on-staff to handle them for free. Then there are HOA fees, property taxes, homeowner's insurance, and more. Even utilities bear considering, as houses typically cost more to heat and cool than apartments.

Depending on the type of home you purchase as well as the location, some of these fees may not apply to you. But rest assured many of them will, so it's vital you weigh these additional costs when coming up with your monthly housing budget.

Get Down with the Down Payment

And so we arrive at the dreaded down payment. You've probably always heard that you must be ready to drop anywhere from 10% to 20% as an upfront down payment. Allow us to break that myth for you. While some people may still want to complete a large down payment, it is absolutely not vital to purchase a home. In fact, the average first-time buyer only puts 7% down, and many loans and programs available to first-time buyers require even less than that.

As with most components of your home-buying budget, what you choose to put down will depend on your situation. You may find it advantageous to make a hefty down payment if your income isn't great but you have a lot saved up, as this could lower your mortgage payments and help you avoid private mortgage insurance. But don't let the myth of a mandatory 20% down payment scare you away from home ownership.

Get Pre-Approved

Unless you hit the lottery or strike rich from an oil deposit, you'll likely pay for your first home with a mortgage loan. Getting pre-approved for a loan from a trusted lender will set the bar for how much home you can afford. However, what you can afford isn't the same as what you should buy.

You've Got This!

Even with this budgeting guide, buying your first home may still feel overwhelming. We understand! Just remember: countless people have done this before, and you can too.

January
29

A common, recurring question in real estate is, "Should I buy or rent?" But perhaps a better question is, "What is the cost of buying vs renting?"

Unfortunately, there really is no simple answer to the first question. The choice of buying or renting comes down to any number of factors that will be unique to your situation.

Are you looking to truly invest in a property? One that you'll build equity in over time? If you answer yes to those questions, then buying is your best option. Privacy and full control over the home are other strong reasons to buy rather than rent.

Conversely, buying a home is a long-term investment. Maybe you want more freedom to move to different areas of town or downsize when you see fit. And if being responsible for home repairs sounds awful, then renting probably suits you.

Money on the Mind

But when you ask about the cost of buying vs renting, the answer becomes a bit clearer, if only slightly. On a fundamental level, buying a house is one of the costliest things any of us will ever do in our lives. Even though the vast majority of homeowners pay for their homes over time via a mortgage loan, there's still the rather large down payment that often costs a pretty penny.

Indeed, a recent survey conducted by Freddie Mac found that renters from multiple income levels view down payments and closing costs as a primary obstacle to home ownership. This belief hasn't changed much across generations, either; 71% of baby boomers, 81% of Gen Xers, and 80% of millennials found these tremendous costs to be prohibitive. Additionally, 40% of renters cite the belief that mortgage payments would be higher than rent payments as another major obstacle on their path to home ownership.

That may hold true in some of the country's most populated cities like Los Angeles or Boston, but you may be surprised at just how affordable owning a home can be. Freddie Mac's survey found that the majority of both renters and homeowners believe their respective living situation is the most affordable option for them. Interestingly, even many of the surveyed homeowners believed renting would be the more affordable option.

However, the same survey shows that isn't necessarily the case. Renters were more likely to be cost-burdened – in other words, 34% of renters spend more than one-third of their income on rent. By comparison, only 25% of homeowners spend that much on their mortgage. That holds especially true in the current generation, as only 17% of modern homeowners spend more than a third of their income on housing as opposed to 41% of renters.

What's Right for You?

Determining whether you should rent or buy a house ultimately comes down to examining you and your family's situation. Practical considerations like committing to a neighborhood versus flexibility to move and others will weigh heavily on your decision. When it comes to the cost of buying vs renting, however, you may find that you're readier for home ownership than you might think.

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