6 Signs It’s Time to Stop Renting and Buy a Home

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Boston is a beautiful city, offering a coalescence of green spaces, historical landmarks, modern high-rises, and a beautiful harbor. A sea of students wander the streets, attracted by the hallowed halls of the city’s countless universities.

It’s common to see bands of new students renting homes together, staying in Boston well after they graduate. As such, many students end up renting for years in the City of Firsts.

After years of renting, you may find yourself debating if you want to trade in the canceled checks to your landlord and start building equity of your own.

To help put Bostonians on the track to purchase a home, the team at Prevu Real Estate outlined the most reliable signs it’s time to stop renting and start buying.

You have enough for a down payment plus extra

Purchasing a home is a costly endeavor. Right at the get-go, buyers need to fund a sizable down payment and plan for hefty closing costs. After working for years and diligently saving, a renter may be better positioned to afford a down payment than they thought.

The average down payment when buying a home is 20% to 25% of the purchase price, but depending on your financial situation and income you may be able to qualify for a mortgage with a down payment of 10% or less. There are even government sponsored loan programs like FHA loans that enable eligible buyers to purchase a home with as little as 3.5%.

Even so, having enough for a down payment is not enough. Buyers trying to secure a Boston home should have several months or years worth of cash reserves saved up as well. These rainy day funds provide a financial cushion that lenders will want to see post closing, and will come in handy for the maintenance that comes with owning a home.

You feel secure in your career

Steady employment is a great way to climb the career ladder, but it also helps buyers take their first step on the homeownership ladder.

After graduating from one of the many institutions of higher learning in Boston, many students end up building careers in the city. There are jobs in finance in the high-rises lining the Spine of Back Bay. High-tech practitioners can find plenty of start-ups populating Kendall Square in Cambridge. Regardless of what industry you choose, if you’re still renting several years into your career, it may be time to make a change.

Mortgage underwriters look for stable employment when issuing loans to purchase a home. So if you’ve worked in the same field and company for at least two years, this can give you added confidence of qualifying for a mortgage.

You are able to get a buyer commission rebate

Despite building long-term equity, part of the apprehension new buyers feel when purchasing a home is spending thousands of their hard-earned savings.

Changes in the real estate industry though created new ways to purchase a home without breaking the bank. Modern brokerages like Prevu Real Estate changed the game by offering homebuyers a commission rebate. Prevu provides the largest commission rebate in the Boston area by providing homebuyers with a cash back rebate up to 2% of the purchase price.

House hunters who know they are getting money back can increase their purchasing power, help furnish the home, or simply use the funds to rebuild exhausted savings.

Your credit score is in good standing

After years of renting, you may think that your credit is not up to snuff to purchase a home.

If you’ve ever financed an automobile, you might be better positioned to buy a home than you thought. Your credit score reflects how well you pay off the debts you accrue. So paying your monthly car payments starts to put you in a good spot.

Aspiring buyers in Boston do not have to rush out to purchase or lease a car to improve their credit. Consistently paying your monthly credit card bill on time and not accumulating large credit card balances are also ways you can build up an attractive credit score over time.

It is always a good idea to have a pulse of your credit score months or years in advance of buying a home. Check your score with one of the credit reporting agencies like Experian, Equifax or TransUnion.

You want to lock in a good mortgage rate

While renting a one-bedroom apartment in Fenway is a blast, it gets tiring several years after graduation. Plus, renting builds no long-term equity, and the current level of mortgage rates are still very attractive.

Interest rates remain historically low, but many experts anticipate mortgage rates will rise in 2022 as the Federal Reserve is likely to raise interest rates to combat rising inflation. Therefore renters thinking of buying their first place should move quickly to lock in low rates.

You found your dream neighborhood

This is not true for all renters, but many Boston residents end up living in several neighborhoods in the city before finding their favorite.

Part of the beauty of renting is that you have the flexibility to experience living all over the city. Many renters use this opportunity to rent in places they might consider living in the long term.

After years of exploring, if you believe you’ve found the neighborhood that feels like home, it might be time to find your dream house or condo.

Have you seen the signs that it’s time for you to buy? Browse listings in your favorite neighborhood and see how much you can save with Prevu’s commission rebate.