Are you thinking about making the change from being a renter to a homeowner? Perhaps you want to stop paying the mortgage of someone else, have more peace of mind, or enjoy the advantages of home ownership. Owning a home can give you great deal of confidence and it’s important to know what to expect during the process.

Patience is Necessary
The path to buying a home isn’t a quick one or two-week process like apartment hunting can be. This is especially true in high housing demand cities like San Francisco, Los Angeles, Orange County, or San Diego in California. The transition from renting to buying is a major task and there are many things going on during the process. 

Throughout the transaction, patience is vital. Stay well-informed with your real estate agent and loan officer. Make informed decisions (not impulsive) by having a good sense of the mortgage process, your ideal neighborhoods, and your future objectives.

Your Monthly Housing Costs
As a renter, you’ll generally pay the monthly rent, a security deposit, and any utilities separately. Once you’re a homeowner, this changes quite a bit. Your monthly costs are the mortgage and any expenses linked to the maintenance of your home. Your property taxes, homeowner’s insurance, and any HOA fees are usually paid every six months or annually.

Where the rent and mortgage payments differ for you are, the rent due on the first covers the month from the first to the end. While mortgage payments, in most cases, are paying for the previous month.  This means the payment is in arrears.

As a renter, your rent went to your landlord. Depending on whether or not they had paid off the property, that money either went toward their mortgage payment or was collected as profit.

Your monthly payment is now being applied to benefit your future financially as the principal loan balance and any accrued interest is being paid down.  You are now on the path to building equity for yourself.

Your new mortgage payment depends on the purchase price and how much of a down payment you have. Down payments can be as low as 3.5% with FHA loans to just 5% for jumbo loans over $636,150 in certain California counties.

Be Ready for a Lifestyle Change
You should have no worries at all since this kind of change isn’t something to be afraid of. It is likely that you’re already in agreement with these changes.

One such change is having more freedom and responsibility within your home. You can now make design changes, remodeling, landscaping all at your discretion (if applicable, subject to HOA rules).

The difference is the cost will also be your responsibility and decision, too.  Buying furniture and landscaping expenses seem to always be the higher than usual unexpected costs new homebuyers experience.

Be Prepared to Ask Questions

When you start on the path of buying a home, search for the assistance of a local real estate professional you are comfortable with and trust who can act as your mentor. It is essential, this person or an expert on their team, are accessible and have your best interests in mind.

Most real estate agents want you to be pre-qualified for a mortgage before starting on this path. You need to get this part taken care of first as you may have reporting errors on your credit report. Your income and existing monthly debts need to qualify for the neighborhood you are seeking to buy a home. Talk with a licensed mortgage professional.