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Why Breaking Your Lease To Buy A House In 2018 Could Be A Smart Decision
I remember purchasing my home July 2012 for $155,000 and thought I got the perfect home for my budget. Sticking to my plan and not paying a penny over was the goal. Fast forward to 2017, a house identical to the one I purchased recently sold for $235,000. That’s a fifty percent increase in valuation over the past five years which is an increase of $387 to my monthly payment. One of the major issues home buyers are facing other than a housing inventory shortage is household income not moving as fast as home value appreciation. Homes on average has increased by 40 percent over the past five years. Since 2009, an increase of nominal wage has either remained low or flat.
So why should you buy now?
If you were keeping up with the market five years ago then you’ll ask yourself “how can I afford to pay an extra $387 for a home when I’ve only seen a marginal increase in wages?” According to the Case-Shiller Home Price Index, in September United States homes prices have increased 6.2 percent over the past year and 2018 could be looking to same. Texas alone has increased at 7.1 percent over the years, much lower than number one Seattle at 12.1 percent change.
What are your options? Before you consider carrying out the full duration of your lease agreement, understand what the reletting options are under your agreement. Some landlords will even work with you if your purpose is purchasing a home. At times you’ll be surprise what you find out. These are questions tenants rarely ask when signing a lease. If the penalty to break the agreement is too stiff, don’t ignore the opportunity to find a replacement to take over the remaining term. Places like Craigslist and Facebook can be a good source to find a short term tenant. Landlord will even run a background check to help you establish the contractual occupancy. Remember there are options to jump into the housing market, you just have to seek them.
Let’s say you want to buy a house now, but your lease is up May 2018. The time frame from when you get qualified and move in your home can be as little as 30-45 days. Many home buyers don’t know when you close on your new home you will skip the following month’s payment before you make your regularly schedule payments. For example, if you close in February your first payment will become due April 1st. importantly, if you are paying for a place to live already why not explore the opportunity of purchasing a home sooner rather than later.
Don't limit yourself on what you can do today by putting it off till tomorrow.
A five-year Dallas-based real estate professional, Stephen Lewis has recently been successfully running his professional business ever since opening in 2016. He has a background in Mortgage Underwriti....