Renting a home and owning a home come with their own unique sets of benefits. While renting a home allows for a certain level of flexibility, owning a home allows the chance to build up equity in a property and put down roots in a community. When transitioning from renter to homeowner, many buyers grow overwhelmed with the additional responsibilities of owning a home, especially if they don’t prepare in advance.
As professionals in the Morris County real estate market, the The Dougherty Group has assisted many buyers in confidently making the leap from a renter to a homeowner. The team works within several desirable neighborhoods across the Morris County real estate market, such as Morristown real estate and Morris Plains real estate. They take pride in helping those they work with find Morris County homes for sale that suit their needs and desires as buyers.
Ready to take the exciting leap into becoming an official Morris County real estate homeowner? Check out these tips by the The Dougherty Group so you can enter this next stage of your life with confidence.
Be aware of upfront costs
To transition from renter to homeowner, you should know the upfront costs of buying a home. A large sum of money, known as the down payment, often must be put down in advance. The down payment is usually 20% property’s total value and is paid by the buyer during the closing.
Purchasing a home with little-to-no money down is possible, but you need to be aware of the additional costs of this method, too. A down payment that is less than 20% of the home value typically results in the homeowner having to pay private mortgage insurance until they achieve 20% equity. Not only does this lead to an additional monthly cost, but it may also cause homeowners to receive higher interest rates on their loans. Be aware of the costs of both approaches and be prepared to pay the costs accompanying the route you take.
Learn the details of the property
Becoming a homeowner means you are solely responsible for the property. Before making an offer, learn everything you can about the property and its details to ensure you make an informed purchase decision. Having a home inspection done is critical. You may be left with a hefty bill if anything breaks down the line. It is best to find out if there are any potential issues before finalizing the sales transaction, and you may want to include a home inspection contingency in your offer. You should also consider the value determined during the home appraisal to ensure you buy the property at a fair market value.
Learning the details of the property requires learning about its neighborhood, too. Spend some time exploring the town the home is located in and find out information about its local community. Investigate the school districts, the entertainment scene, public services, and facilities. If you work with a local real estate agent, you gain expert advice on the neighborhoods they serve. By completing your purchase as a team, you will avoid buyer’s remorse and become very familiar with the property you buy.
Develop a monthly budget
After finding a home you intend to purchase, formulate a monthly budget to get a clear picture of the costs. As a homeowner, you’ll be paying for monthly utilities, homeowners insurance, property taxes, and any maintenance the home requires. You’ll also have a monthly mortgage payment, and if you put down less than 20% for the down payment, you’ll also have private mortgage insurance.
Evaluate your new monthly costs so that you’re well-prepared and don’t fall into financial trouble down the line. Many professionals recommend spending no more than 25%–30% of your gross income on housing; this way, you have enough to pay for all your other expenses without overextending your budget. Falling behind on bills is one of a homeowner’s biggest nightmares, and developing a monthly budget that prepares you for the costs is one of the best ways to ensure you never find yourself in this challenging financial situation.
Create a safety net
Once it’s officially time to advance from renter to homeowner, create a financial safety net in case you encounter any unforeseen obstacles. Buying a home involves many upfront costs, but you don't want to drain your bank account to purchase the property, or you may run into trouble later. Your landlord handled property maintenance and repairs while you were a renter, but now that you’ll be a homeowner, all of this is your responsibility. If the pipes burst, the air conditioning system breaks down, the roof leaks, or anything else happens, these costs will all be yours to pay. To make sure you’re ready to be a homeowner, create a financial safety net to keep aside that contains approximately six months of living expenses.
Making the leap from renter to homeowner may feel intimidating, but with some preparation, you’ll be able to do it confidently. By being aware of upfront costs, learning the property details, developing a monthly budget, and creating a safety net, you’ll set yourself up for success and make your transition from renter to homeowner smooth.
If you’re planning to make the leap from renter to homeowner and require a qualified agent in the Morris County real estate market, contact The Dougherty Group today. The team regularly handles transactions involving Morris County, N.J., homes for sale in highly desirable neighborhoods, including the Morristown real estate and Morris Plains real estate markets. The Dougherty Group can help you find Morris County homes for sale that are perfect for you as you become a homeowner in the Morristown real estate market.
Contact The Dougherty Group by phone – at (973) 309-6178 or (862) 812-0962 — by email at [email protected] or [email protected] — or by visiting the contact form on their website.
