Buying a Reno Home? What Do You Do First?
Last week, apartment tracker Adobo released their National Apartment Report for December 2017. In it, Reno came in fourth place across the entire United States for the highest increase in rents over the past year. Renting no longer appears to be an affordable alternative to home ownership. Perhaps you’ve decided that you want to own a Reno home instead. What do you do first?
Buying a Reno Home?
First of all, you’re going to need to pull your credit report before you buy a Reno home. Why? In the past, the FTC reported that as many as one in five people have errors listed on their reports. This may negatively impact your credit score. But it can be corrected. Visit AnnualCreditReport.com to pull your free reports from TransUnion, Equifax, and Experian. If you find an error, visit the website of the agency that shows the error to dispute it. Remember, you’re going to need proof of your claim. Make sure you pay ALL your bills on time each month. Even one day late can ding your credit score. Then, start paying down your revolving credit accounts to at least half of their limits. The lower the balance, the higher your score. Finally, don’t open up any new credit accounts. Every inquiry means a new ding on your credit report. The longer you have a credit account in good standing, the better it looks for your credit score. So, new accounts can hurt you.
Show Me the Money
The next step in buying a Reno home involves money, of course. In particular? Your down payment. The higher your down payment, the lower your mortgage payment will be. Lenders like to see a healthy 20% down. That shows financial responsibility as well as saves you from paying any PMI (private mortgage insurance). With a current median price of $355,000 for a Reno/Sparks home, 20% translates to $71,000. And that’s before closing costs. First-time home buyers (those who haven’t owned a home in the last three years) may qualify for as little as 3-3.5% down, depending on the type of loan you pursue. Even at 3.5%, you’re looking at a down payment of $12,425 before closing costs. Over a two year span, that translates to roughly $515 a month. Where are you going to find that extra money?
Perhaps the best piece of advice I can give you in locating “hidden” money is to create a budget. Lay out all your expenditures for a month. These include current rent, utilities, groceries, car loans, credit card bills, student loans, medical expenses, entertainment, etc. Compare this total with your monthly take-home pay. You may be surprised at how quickly those “extras” add up. You don’t have to live like a hermit for the next two years. Cut down (but don’t cut out) your extra expenses. Instead of a daily latte, make it a Friday morning treat. Go out to lunch on a Sunday afternoon instead of an expensive dinner on Saturday night. There are always free events going on around Reno, too. Check those out. Then, put the money you save into a separate down payment account and watch it grow.
Protect Your Identity
Identity theft is on the rise. One of the times our credit is most vulnerable is during a real estate transaction. Even with the most meticulous lending institutions, personal information can slip into the wrong hands amid the volumes of paperwork. And, after the Equifax breach announced earlier this year, you can’t be too careful. So, when buying a Reno home, protect your identity. How? Don’t just toss old info in the trash. Invest in a cross-cut shredder for your home. Shred all unnecessary personal documents. These include bank statements, medical information, old 401k/IRA info, credit card statements, etc. Ask your lender what they do with your paperwork after they’re done with it. They should have a secure disposal system in place.
Then, sign up for an identity protection service. The two companies that continually pop up at the top of everyone’s “best” lists are Lifelock and Identity Force. For a fee, these companies monitor the activity on your credit, including inquiries, new accounts, and unusual purchases. After you’ve worked so hard to get your credit in top shape, it would be heartbreaking to lose it all to an identity thief. Sign up for a monitoring service right away.
Buying a Reno home may be more feasible than you think. Buckle down, do a little budgeting, and you’ll realize your dream of becoming a Reno homeowner before you know it.