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How to go from Renter to Homeowner
From Renter to Homeowner
Buying your first home can be very exciting, especially if you are a renter that is sick of throwing your money away each month. However, while it is true that you build equity by owning a home and gain freedom as a homeowner, there are a few things that you give up as well. While there is absolutely no way you should let this prevent you from looking at homes for sale in Tulsa, you should be aware of the changes that occur when you go from renter to homeowner. By walking into a new home prepared, there are less chances that you will be caught off-guard both emotionally and financially. If you need my help call me and we can talk. Call Now
Get Comfortable with the Upfront Costs of Buying a Tulsa Home
One of the largest leaps you have to make when you move from renter to homeowner is saving for the upfront costs of doing so. As a renter you no doubt had to pay a deposit before moving in, but that does not compare to the costs of purchasing a home. For most people, the largest obstacle to purchasing homes for sale in Tulsa is the down payment. In general, you can expect to pay between 3% and 20% depending on the type of mortgage that you are able to obtain.
First time homeowners can take advantage of programs from the Federal Housing Administration that can help take the down payment down to 3%, but in return expect to pay higher monthly payments. Also, bear in mind that 3% may sound small, but it is a significant price tag when you consider the median home value in Tulsa is $137,700. For a Tulsa home priced as such, you would have to pay at least $4,131.
Prepare for Closing Costs Associated with Tulsa Homes for Sale
Unfortunately, the upfront costs of buying a home do not end at the down payment, because you also will have to worry about closing costs. Closing costs tend to be around $2,000 or more for an average priced Tulsa home, and cover necessities of home buying such as home inspection, title insurance, appraisal, home loan origination, and insurance escrow. If you have a motivated seller you may be able to get them to cover some of the closing costs.
While this may seem intimidating, the good news is that the average Tulsa renter ends up paying less in monthly payments once they purchase a home. Of course, the price of the home and your mortgage lender’s terms will pay a part in your mortgage payments, but, in general owning a home in Tulsa can cost you less monthly overall and help you build equity. Therefore, once you can cover the upfront costs, it is certainly worth the investment.
Extra Costs of owning a Home
Moving up the ladder is exciting, just make sure you are budgeting wisely to prepare for it. In addition to a mortgage payment, you will have to add utilities, mortgage insurance, and property insurance to your monthly expenses. In most cases, your property taxes will be rolled into your mortgage payment in an escrow account, but if they are not you will need to be ready to pay when billed by the city. Your homeowner’s insurance payment may or may not be bundled into your mortgage payment. As you may guess, these raise the price on your payment each month, which is why you cannot always trust online calculators that tell you your estimated monthly payment, because they don’t account for these extras. Additionally, there are many subdivisions in the greater Tulsa area, and if you choose a Tulsa home for sale in one of them, you may need to pay Homeowners Association Fees, so this is one more thing to add into the budget.
Making Your New Home Yours
Now that you have all the required expenses out of the way, you may want to put a little more money away for the fun stuff. As a Tulsa renter you likely could not do much with your apartment or home, but now that you own a home you can decorate it and remodel it anyway you like. Even a move-in ready home may require some attention in order to truly make it yours. This is the fun part of being a homeowner, but it still costs money. Whether you want to replace the carpeting, repaint the walls, change the shutters, or do some landscaping, it will all cost you money. The good news is you can spread your projects out so these don’t have to be immediate costs.
Contact a Mortgage Broker
Now that you know the expenses, you are ready to contact a mortgage broker and get the home buying process started. The Tulsa real estate market is vast, so a great way to narrow down your options is to find out the loan amount you will be approved for. Choose a mortgage broker wisely and if you don’t know where to start call me and I will point out a few lenders you can look at. Once you have your pre-approval letter you are ready to start shopping for homes within your budget.
Find a Real Estate Agent
While it is true you can browse Tulsa homes for sale on your own, you will have a much better time shopping for homes with an agent. Not only can an agent help you find a home in Tulsa, but they will be able to help negotiate the price and terms of your home purchase. They will become your ally in the home buying process, which can quickly get confusing for first time home buyers. If you choose the right agent, they will make your transaction as stress free as possible, and look out for your best interests. Additionally, real estate agents have a large network of contacts and may know of homes for sale in Tulsa that are not listed yet, allowing you to have the inside track when finding the perfect home for your family. If you need a Realtor or have any questions please call me (918)730-7075
Get Out There and Visit Homes
Finally, it is time to start looking at potential homes. The first few may not be good fits for you, this happens in most cases, but each is a learning experience. Walking through homes for sale in Tulsa allows you to see what you want out of a home, and what you do not want so that you and your agent can start focusing on homes that are a perfect match for you. Make sure to pay attention to the neighborhoods that the homes are located in and keep things like your commute time, neighbors, and local schools in mind when making your final decision.