Make the Leap from Rent to Mortgage!

Make the Leap from Rent to Mortgage! (chalkboard rent to buy)

If you have been saving for a down payment and dreaming of owning your own home, you may feel like you’re ready to make the leap from rent to mortgage. You’ve been looking at your budget, and your future, and want to build equity in a home of your own. That’s the American dream!

The Columbus Team knows that the leap from rent to mortgage is more than just exchanging one payment for another. We want you to be prepared for both a lender’s evaluation of your financial readiness and the very real expenses of homeownership. That way, you can relax and enjoy the process of choosing and buying the home of your dreams.

Mortgage readiness checklist:

  • Budget for a rent/mortgage payment that is about 25% of your monthly income.
  • A great credit score allows banks to offer you lower interest rates on your mortgage, so it’s important to have the best score possible. Dispute mistakes, make on-time payments, and try to pay down balances until you are using only about 30-35% of your available credit. Don’t cancel your oldest accounts, as that shortens your history.
  • A down payment can affect your bottom line for years. If you put 20% down, you won’t be required to add mortgage insurance to your monthly payments but as little as 5% down is possible for purchase.
  • Debt-to-income ratio is another factor lender’s look at when evaluating your financial health. Paying off a small loan or getting your credit cards down to 30% of the total credit available can make you a more attractive lending risk. Ask your favorite lender what they look for, so you can prepare.
  • Factor taxes into the equation. Mortgage payments consist of payments to principal, interest, taxes, homeowner’s insurance, and other costs. Take a look at your favorite neighborhoods and find out the amount each homeowner pays per $100K of home value.
  • A condo can be the perfect home for many, just remember to add the HOA fee to your monthly expenses.
  • Set aside a certain amount for your home repair fund. You won’t have a landlord to call for fixing a clogged drain, broken appliance, or a leak in the roof.
  • Homeowners also mow their own lawns, shovel their own snow, and more. A small fund to purchase tools and supplies to care for your new home is wise choice!

14 Steps You Must Take Before Buying a Home

14 Steps to Buying a HomeIf you’re a first-time homebuyer, purchasing a home might seem straight forward, but there are more steps than just searching and making an offer.  Here are all the tasks you can expect when purchasing your first home.  If you’re already a homeowner, consider this a refresher!

14 Steps to Buying a Home

  1. Determine what’s on your list for your dream home.  A location close to schools, work, recreation? What features are important to you, such as a garage, fireplace, roomy back yard, number of bedrooms? Does the home need to be on a bus route, or in a certain school district?
  2. Select the right REALTOR for your needs. A REALTOR costs you nothing, and does most of the actual searching and sourcing of homes for you, based on the list of features you supply. A REALTOR will help you negotiate the purchase contract and manage the timeline to close to ensure your contract stays in play until you can close. It’s in your best interest to hire a REALTOR, such as The Columbus Team, with strong experience and a proven track record.
  3. Become pre-approved for financing. It’s a simple step that makes you a very desirable buyer. Sellers know you are ready and able to buy, and that gives you a stronger negotiating position. Great homes at market prices often attract multiple buyers. It pays to be ready to offer!
  4. Decide if you need a real estate lawyer.  A lawyer can review all the documents,  help write contracts and contingencies. Although not every buyer uses one, it may be the right option for you. The fees are very affordable, often in the $300-$500 range.
  5. View selected homes. Take notes and pictures.  It’s surprising how difficult it can be to remember which house had which features after seeing several properties for sale.
  6. Narrow your choices, and prepare to make an offer.  Now is the time to think of possible contingencies, and to use your REALTOR’s experience and Comparative Market Analysis of homes similar to your favorite.
  7. Sign the purchase contract and write a check for any earnest money deposit. If the seller counters your offer, be prepared to negotiate. Have an idea in mind of what your “bottom line” will be, but remain somewhat flexible. Also, don’t forget that with each counter offer or rejected offer, that previous offer is now null and void.
  8. Come to an agreement, and sign the contract.
  9. Complete the loan application process; this should be a snap if you’re already pre-approved.
  10. Determine the closing date.
  11. Arrange inspections of your dream home. A whole home inspection, termites, radon, lead, well and gas line inspection are standard, but inspections for mold and other issues are also possible. If there are negative findings, be prepared to negotiate with the seller for remediation or compensation for the issues. Double check with your own insurance about insuring the new home, it’s another great way to be forewarned of possible issues with the home.
  12. Make final arrangements for all financing prior to the closing.
  13. Prepare for your change of address. Forward mail, notify bill collectors, friends, family, and arrange for the transfer of utilities.
  14. Attend the closing, sign the forms, pay the fees, and receive the keys to your new home.

Congratulations!  You have completed all 14 Steps to Buying a Home and are now ready to move into your new home!

Checklist for Organizing Your Move

organize-your-move-checklist

Moving is stressful, using an experienced, knowledgeable Realtor helps reduce the stress significantly.  Being organized and prepared for the move also helps to reduce stress.  Hopefully this simple organizing your move checklist will help streamline the moving process so you have more time and energy to celebrate your new home and neighborhood.

  • Gather your supplies. Large trash bags, zip-top storage bags, boxes, markers, scissors, packing or strapping tape, labels, paper or newspaper, bubble or foam wrap. Purchase or borrow what you need, but try and gather all your supplies before beginning to pack. It makes for fewer errands and interruptions.
  • Sort your stuff. Decide what to keep, donate, or discard. Move donation items into boxes or trash bags, and bag trash. It’s easier more efficient to do one room at a time.
  • Discard and donate ASAP. Move discards and donations immediately out of the home to their ultimate destination, the sooner the better. Less clutter means easier packing!
  • Discard Carefully. Make sure you separate toxic items like old paint and batteries and consult your town guidelines for disposal. Shred personal papers. Ensure computers, phones, and tablets are wiped clean of personal data before donation or discarding.
  • Choose a packing system. Whether you color code, number boxes, write the packing list on the box, use labels, organize what you pack so it’s easy for you or your movers to know where to place the boxes in your new home.
  • Pack thoughtfully. Take your time, take breaks, and pack first what you won’t need right away. When packing, you don’t have to do a single room at a time unless you’re in a huge hurry. Packing off-season holiday and clothing items first just makes sense.
  • Pack fragile items early. Don’t wait until the last moment to pack Grandma’s mirror or your fine crystal. Pack them while you still have energy and time to take the care those items need. Label the boxes FRAGILE on every side.
  • Pack smart. Put containers of liquids such as toiletries, cleaning supplies, or foods in zip-top bags to prevent and contain spills. While packing bathroom items, roll china soap dishes in towels and wrap curtain rings in the shower curtain. This keeps like with like, but protects breakables or easily lost items. Tape cords and chargers to the electronics they match. Tape remotes, too.
  • Set aside a starter kit. Put aside a few boxes for the bare essentials in your new house. Cleaning supplies, trash bags, etc. can be packed in a clean tall kitchen trash can. Fill starter boxes with first day essentials from a few pots, pans, dishes, plastic tableware, to coffee maker, non-perishable foods, and children’s essentials. Pack clothes and toiletries in a suitcase, and stock your diaper bag if needed. Pack a cooler with some perishable essentials, too, in case you can’t get to the store right away. These important starter kit items should go into your car, or be loaded last into the truck so they can be identified and used your first day in your new home.
  • Traffic control. As boxes come off the moving truck, assign someone as traffic control, so boxes are identified and movers (paid or volunteer) know which boxes go where. This will save your time and your back from moving heavy boxes room-to-room later.
  • Celebrate. Do take time to celebrate when all your boxes are moved. Don’t dive right into unpacking anything but your starter kit. Throw a tablecloth over a few boxes and order a pizza, or go out for dinner and enjoy your new neighborhood. Give yourself a break before heading into the unpacking stage!