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How to Move from Renting to Buying a House

After years of renting an apartment, condo or house in the Valley, you're more than ready to take the plunge and buy a home. You’ve conducted extensive online research, grilled your family members and friends for info, and scrimped and saved to have your down payment ready.

But that’s not all you need to get started. Before you start to pick out new furniture and gather test swatches at the nearest home improvement store, work through this handy checklist that will take you from renter to homeowner in a flash.

Step 1: Find Your Target Price Range

This mini checklist will help you narrow down your search to homes that you can afford:

Check your credit report. A higher FICO credit score could help you qualify for a lower interest rate on your mortgage.

Consider your closing cost options You can pay with cash and avoid increasing your mortgage loan rate—or you can take out a no closing cost mortgage, which means you can either roll the closing costs into your loan (increasing your monthly payments) or the lender will cover the costs (resulting in a higher interest rate).

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Tip: Get cash toward your closing costs by using a Participating Real Estate Broker!1

Obtain a pre-qualification letter. Having a pre-approval or pre-qualification letter in hand can help you get the home you want. Items that your lender may request can include:

  • Legal identification
  • Proof of income
  • Employment information/proof of employment
  • Bank statements
  • Information on existing debts

One of our Mortgage Loan Officers can help you with the pre-approval process and walk you through the ins and outs of buying a home.

Step 2: Choose Your Target Neighborhoods

Once you have a good handle on what you can afford, start narrowing down your possible locations. Here are some questions that homebuyers should ask themselves before settling on a particular area of the Valley:

  1. Do you already have a target radius in mind? For example, “I want to be 20 minutes or less from work” or “I need to stay near my child’s current school.”
  2. If not, what type of area do you prefer? A family-oriented suburb? The bustle of downtown? A place with a thriving nightlife scene?
  3. How important is being in a good school district?
  4. Are you open to a townhome, patio home or condo, or will your family thrive best in a detached home?

Answering these questions can help you navigate through the steps of buying a house.

Step 3: Find Your Perfect Place (With a Little Help)

It’s possible to find the home of your dreams all on your own. However, having helpful resources available when you need them can pave the way for a far easier and faster home search. To get you on the road to homeownership faster,

  • Download a free app like HomeScout2 and start browsing homes for sale. Remember that you’ll still need to see them in person. Much like internet dating, a home may not live up to its dazzling online profile when you see it in person.
  • Get a real estate agent or broker to help you narrow down your options. They can help you weed out the duds from the deals.
  • Ask your broker to send you a weekly list of MLS listings that match your search. Once you select your favorites, he or she can arrange a tour.

For many future homeowners, touring potential dream homes is the most exciting part of the homebuying process. For others, getting keys to a newly purchased home is the “big moment.” However, your emotions run high during this time. Having help assures that you’ll get the support you need to make the right decision for you and your family.

Step 4: Make an Offer

Once you’ve found the home you want, it’s time to make your offer on this marvelous abode. Once your broker or agent presents your offer in writing, the seller will then accept, counter or decline the offer.

  • Acceptance means that you will go directly to the next steps in the homebuying process, which include a home inspection, completing mortgage paperwork and settling the financial aspects of the transaction.
  • If you receive a counteroffer, the seller is open to negotiations and likely has lowered their price closer to your offer. You can either accept the counteroffer or make a new offer to the seller.
  • If the offer is declined, you can either amend your offer or continue your home search.

Once you’ve chosen a home and the seller accepts your offer, you'll need to arrange a home inspection — the cost of which is typically paid by the buyer. Depending on the results, you may either proceed with the homebuying process, ask the seller to fix the problem or let the home go and resume your search.

Step 5: Bye, Bye, Lease! Hello, Home Sweet Home.

After the home inspection, your broker or agent will help you with the remaining financial paperwork as you head toward closing, which is the final step in a real estate transaction. It takes an average of 40 days3 to close on a home. You can pay your rent on the first of the month as usual for the month ahead. Then let your landlord know that you will be terminating your lease or not renewing.

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Tip: Your first mortgage payment is collected in arrears; this means that your first monthly payment will be due a full month after the last day of the month in which you close. This will give you some financial wiggle room and help the transition from renting to owning go more smoothly.

Transitioning from renting to buying isn’t simple, but it’s manageable when broken down into smaller goals. Review these steps prior to looking at properties and then start taking action to get pre-qualified and apply for a home loan. If you have any questions, our mortgage loan officers and real estate brokers are here to help!

Get prepared to purchase your next place with our HomeBuying Toolkit. It has all the materials you need to build a solid knowledge foundation. These resources are included in the toolkit:

  • The Phoenix-Area Homebuyer’s Guide
  • The Homebuying Pro’s “Things to Consider” Guide
  • The Smart Homebuyer’s Guide to Greater Phoenix Neighborhoods.

It’s time to settle in with some good reading! Learn about the steps in the homebuying process, find the best neighborhood for you and have fun as you go on your purchasing adventure!

Desert Financial Home Loan Solutions

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1Participation in the Real Estate Broker Program is voluntary. Desert Financial Credit Union and its subsidiary Define Mortgage Solutions LLC do not receive any benefit, monetary or otherwise, from the Participating Broker under this program. Participating Brokers are non-affiliated third parties of Define Mortgage Solutions LLC and Define Mortgage Solutions LLC makes no warranties or representations about the services provided by Participating Brokers. To participate in this program, the member does not have to finance mortgage loan through Define Mortgage Solutions LLC. For full program details, see the Real Estate Broker Program Member Notice Acknowledgement. Mortgage loans are offered by Define Mortgage Solutions, LLC NMLS ID #1761612, a subsidiary of Desert Financial Credit Union. BK#0949053
2https://solutions.desertfinancial.com/Homescout
3https://www.apartmenttherapy.com/time-it-right-here-s-what-the-transition-from-renting-to-owning-a-home-looks-like-and-costs-246935

The material presented here is for educational purposes only, and is not intended to be used as financial, investment, or legal advice.