More than 100 million Americans rent, but studies show that there are more homeowners than renters. As of 2018, around 64.8% of the American population are homeowners, and more intend to be so in the future. Unfortunately, the cost of home loans can be overwhelming, especially with the rising inflation. Here are some tips if you want to be a future homeowner:
Know What Home You Want
Do you intend to hire custom home builders in Guelph (when you move to Canada) or do you want to purchase a ready-made home in a less populated area in the United States? A custom home requires the service of an architect, although you can always make use of pre-designed homes and have builders create yours using a particular pattern.
Whether you intend to build or just buy, it’s a good idea to have an image of this future home in your head. When it’s time to start discussing plans with your chosen builder, you won’t have a hard time making important decisions.
Fix Your Credit Rating
A home mortgage loan can be extremely overwhelming, especially when coupled with a high interest rate. This is why it’s important to have an excellent credit rating even before you approach the bank.
To do this, you’ll need to eliminate your debt and take a close look at your credit score every year. You want that score to be as accurate as possible and with a rating of 700 or more. If you can get it up to 800, then you’ll be able to get the most affordable interest rates in the market.
Set Aside Money for Down Payment
A large factor in determining interest rates would be the down payment you offer for the house. A big down payment means a large reduction on the interest rate. So, make a point of setting aside at least 20% of the possible value of your dream home.
Start Investing in Small Home Items
It’s also a good idea to start buying small items that will be placed in your future home. Purchase a set of dishes, some curtains, bed sheets, vases, and other home décor bit by bit over the years. This will help motivate you towards actually buying that dream house, so you’ll have somewhere to put those things. Take note that setting aside money for a down payment should take priority over the small home item purchases you want to make.
Know When it’s Time
Chances are you’re renting now until you have your own place. If you’re planning to have your own home, it makes sense to have a specific time period for that dream to come true. Say, in 5 or 10 years? There are lots of possible indicators that it’s “time.”
For example, you’ve got the down payment ready, or perhaps you’ve finally wiped out all other debts. If you do the math and realize that after accounting for all other expenses, you would actually be paying less for a mortgage than rent, then this is possibly the best time to make that dream come true.
Of course, these are just some of the things you can do now that will help you live on your own comfortably in the future. Keep in mind that everything you do today will have an impact on your future options, so be mindful of every decision you make.