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Are you a Seattle-area renter who plans to buy a home in the near future? Do you have questions about how to transition from renting to buying?
You’re in the right place. Below, we’ve assembled some useful tips and strategies for Seattle residents who want to switch from renting to buying a home.
Transitioning from renter to homeowner can seem overwhelming at first. So let’s break it down to the basics. Here are five things you can start doing now to increase your chance for success.
A lot of renters are surprised by all of the upfront costs associated with a home purchase. While most renters understand the concept of a down payment, they might be less familiar with closing costs and other expenses.
One of the best things you can do right now, if you plan to switch from renting to buying in Seattle, is to start saving money. You’ll need enough to cover your down payment, as well as your closing costs. On a typical home purchase in the Seattle area, closing costs can add up to thousands of dollars. So the sooner you start saving, the better.
It’s also wise to do a little budgeting math. The good news is you don’t have to be a financial expert to create a simple housing budget. All you have to do is look at the amount of money you earn each month, the amount needed to cover your various debts, and the amount you’d like to have left over for savings and lifestyle expenses.
Whatever your left with is the amount you could potentially put toward a mortgage payment. This is an important number to keep in mind, as you start the house hunting process.
In order to do an accurate comparison between the cost of renting versus buying in the Seattle area, you need to consider all purchase-related expenses.
Believe it or not, a typical mortgage payment is made up of four different components. There’s the principal amount borrowed, the interest rate, property taxes, and homeowners insurance. To find out how your current rent payments stack up against a monthly housing payment, you have to take all of these factors into account.
Tip: Our website offers some helpful mortgage calculators to help you crunch the numbers.
Homeownership offers a lot of benefits when compared to renting, and some of them might not be obvious at first glance.
Sure, you want to compare the financial aspects of renting versus buying in Seattle. But it’s equally important to consider the intangible benefits of owning a home.
You’ll be able to do things as a homeowner you couldn’t do as a renter. You can change the configuration of your home, or build a patio, or change the paint scheme. None of these things are doable when you’re renting.
You also gain some investment benefits when buying a home in Seattle. When you rent, you make a monthly payment that allows you to occupy the unit. But you don’t gain anything else in return. With a house payment, you’re investing in something you actually own. You gain equity over time, with each payment you make. So it becomes an asset and a place to live.
Seattle is a highly competitive real estate market. As a result, inventory levels sometimes fall well below demand. This forces buyers to compete for a limited number of properties.
On top of that, home prices in our area have climbed significantly over the past couple of years. To overcome these hurdles, it might help to expand your home search to the widest possible area. This will give you more properties to choose from and a broader range of prices.
You might not be able to find a house in your neighborhood of choice. But you could have an easier time in one of the surrounding communities. So try to be open-minded and flexible when it comes to the house-hunting process.
When you switch from renting to buying a home in Seattle, you will take on certain obligations you didn’t have as a renter. Maintenance and upkeep, for example, can take up a lot of your time and resources.
Some people who transition from renting to buying are surprised by all of the maintenance-related tasks they have to keep up with.
The point is, you have to be prepared for a lifestyle shift when you go from renting to buying a home. And a little research goes a long way. Google some “home maintenance checklists” and read through the recommendations. This will show you what it takes to keep a home in tip-top shape.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.