Renting Now? Start Planning to Buy a House BEFORE Your Lease Ends

Hey guys, welcome back to another week of Mortgage Matters in Minutes. I'm Brent Rasmussen, owner of Mortgage Specialists. In this 224th episode, we're here to talk to renters. And hopefully you are a renter and you're checking out this video here today. But if you're not, share it with your fellow younger renters or anyone that's renting a home because we feel with a little bit of planning, you can be into a home anywhere from 12 to 24 months. So, we're going to talk about that a little bit today is when to start planning to buy a house. And most people end up thinking about buying or where they live when their lease comes due. And they might forget how quickly a year goes by or two years goes by and next thing you know, hey, I have to be out of my property by September 30th and they call us on September 1st. And usually with that amount of time, there isn't enough to get a pre-approval and find a house and close and move in all of that time frame. And so we're going to quickly in a short video here talk about those steps today. Is that maybe right when you move into your apartment, start conversating with the mortgage loan officer to develop a plan on what you might need to do to qualify. I think a lot of people just guess on what's needed, whether I have perfect credit, so I'm fine, but they don't think about what their debts are. They might not think about how much they need for a down payment. And that's what conversating with us can totally do. Here in the Omaha area, by studies that an average rent of a three-bedroom home, which again is across the whole city, is about 19 to $1,900 to $2,000. And then also looking at generally our first-time home buyers, we're looking at a payment around 25 to $2700, which would include the loan payment, house insurance, and taxes. So, we want to compare apples to apples here and not just kind of blow smoke and throw fake numbers at you because the internet does that all the time and real estate websites do that all the time. They assume you have a massive down payment or they assume all kinds of things. So, if we're looking at the difference between rent and a house, ownership or taking out a loan, yeah, we're looking at that 78, $900 difference, and that seems really, really big for most people. but it's not always just that jump in payment that makes a little bit of a difference in making that extra amount of payment. You're actually able to build assets and worth as your home value goes up and your loan payment goes down. So we see that assists individuals in gaining net value, net worth, where as opposed to paying rent, your net value stays at zero along the way. So talking to a mortgage lender right when you sign your lease is not a bad thing. That might be 12 months out, that might be 24 months out. And what we're going to do first obviously is review your credit. Make sure your credit score looks good, your history looks good, and also then looking at your debt situations to find out how much debt or debt payments that you have. Where many people know and heard the word down payment, but sometimes using money to pay off debts goes a lot better to qualify than using money to put for a down payment. Also, when we're looking at what's needed, we want to talk about that down payment money. And many times family members remember where they were at trying to buy their first home and their family helped them out. And so that's always a conversation is looking at credit, debts, income, and how much you have for a down payment. Those three things or four things there are the items that we would sit down with renters and discuss and talk about to make a plan because not every single person is the same on how much they make, how much they have, and/or how much they want to buy where we still feel getting into any house price range is still going to continue to build wealth along the way. Most people think, oh, I have to have 20% down. I have to be in my job for two years. I have to show rent history for two years. We hear all kinds of myths out there, and those aren't really true at all. We can look at lesser down payments. We can look at your job situation and start getting a mortgage even before you start working out of college or out of school or out of a trade school. So, there's scenarios that we see flying out there all the time that aren't exactly correct. But what we always suggest to every first time buyer is let's sit down early, six to 12 months before you are even thinking about buying a home to get a game plan put together so you can start thinking what do I need to do? Do I need to save more money? Do I need to pay off more debts or am I good already? And let's keep the course of what your plan is that you have of savings, taking care of your income, taking care of your credit. And then when you are ready to buy, it isn't a disappointment because you're missing one thing necessarily at that pre-approval. Usually then when we talk about year or six months in advance, we're redoing that pre-approval 3 to four months before you need it because at that point in time, then you're able to verify all of our documentation, start looking for houses, and then usually we close within 30 to 60 days. Every seller gets a little bit different time frame for the buyer of when they actually want to close and that can be negotiated obviously, but leaving yourself time for all those things to land into place because so many people want to move out of their apartment this day and into their house the next day. Well, much of the time we feel that a little bit of overlap on both of those two isn't a bad thing. It gives you days to move in. It gives you time to maybe paint the house, clean the house, prepare the house for what you want, and slowly take your stuff from an apartment or a rental house to the new home as well. So, there's different strategies on how to make the stress a little bit less in your life because people are excited and think America of this white picket fence, but in essence, it's still a very challenging time to go through to make all of these things happen. so that when you're closing on time, everything is lined up, ready to go, and you're able to move into that house. It can be a lot more than people would assume or think. So, making a game plan a good amount of time in advance is what we always recommend. So, if you're still here and checking us out, thank you very much. anyone feel free to give us a call at 402-991-5153 if you have questions. We can answer those questions. we can make the situation different for you and we can make a plan that you would be able to follow moving forward. And then you can check us out for lots of information on our website at mtg-specialists.com. And have a great rest of your week. We'll see you here next time. 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