Staples Group Mortgage | St. George, Utah

Best Tips on How to Break the Monthly Rent Cycle

Owning a home is an amazing experience, and an opportunity to build equity. For some people, it is almost impossible saving enough home deposit and hence they end up opting to rent a home. 

Do you feel it is time to break the monthly rent cycle? In this article, we present some suggestions proven to help people like you graduate from home rentals in Arizona to the full experience of homeownership in Arizona. 

Sit back, keep reading and apply the tips we suggest here. You will be surprised how easy it is, transitioning from the monthly rent cycle to becoming a homeowner in Arizona. 

  1. Pay Rent at the Due Date or Before

I know this sounds obvious. However, falling behind on rent could affect your credit score! Many lenders today will consider credit score before lending mortgages to purchase a home. 

On the other side, landlords will report late rent payments, which affects your eligibility to borrow a home buying mortgage. To avoid a poor credit rating, observe the rent due dates.   

Apart from ensuring timely rent payments, all other debts and financial obligations should be honored when due. The utility bills and repayment of past loans and other debts owed to people should be honored when due. 

This ensures you are not listed as a defaulter and keeps your creditworthiness in good records. 

Therefore, with a good credit score, you can get a mortgage to kick start your journey to homeownership. Here are a handful of tips to help you with credit score issues:

  • Know what can affect your credit score
  • Ensure timely payment of bills including rent
  • The credit card balances should be kept low
  • Do not close the old credit cards
  • Manage your other debts and repay when due
  • Limit applications for new credit
  • Watch your credit report on a regular basis

The credit score is an important factor when it comes to fast-tracking your journey to homeownership. Make sure you pay all the debts on time and avoid taking new debts. 

2. Save Smart To Raise the Down Payments

Many people are dreaming of owning a home. However, if they opened up, they will tell you that saving for the down payment remains a huge challenge. In fact, the monthly rent cycle takes a huge percent of income, leaving very little to finance the monthly expenses and afford a saving. When they approach a bank for a mortgage, the amount left in the savings account is insufficient to fund the 20% down payment. 

Are you struggling to save up for a down payment? There are different tips that could help you successfully save for a down payment. Here are some suggestions that worked for others:

  • Cut down on expenses: this could mean downsizing to reduce the monthly rent
  • Open a goal-saving account 
  • Automated savings such that the amount is deducted from the salary account 
  • Save cash windfalls which include your per-diem, tax refunds, and cash gifts
  • Spend on a budget
  • Use online savings app
  • Involve your spouse 

Growing your savings account requires your hundred percent input. You ought to ensure a disciplined saving culture to grow that account and afford the 20% down payment. 

3. Which of the Arizona Mortgage Programs is best for you?

At this point, you have a good credit score, and you are working towards raising a substantial amount to afford the 20% down payment. 

However, you have yet to identify the best home buying programs to fund your lifetime goal. What are the different home buying programs available in Arizona? 

Here is a list of the different mortgage programs to help you fund your dream of owning a home in AZ. 

  • FHA Home Loans AZ

This is a down payment assistance program under the Federal Housing Administration. The FHA mortgage is intended to help people overcome the down payment barrier, which is the reason why the majority of citizens opt for home rentals in Arizona. 

  • The VA Home Loans 

For veterans and surviving spouses, the VA home loan is a good option when it comes to financing your dream home. The VA mortgages are meant to assist people to meet the housing needs

  • The USDA home loan

This is a government loan program designed to assist those willing to purchase a property in rural areas. Therefore, if you are looking to purchase a property around the outskirts of AZ, the USDA is an ideal home buying program. 

  • Conventional Loan

Finally, we have the conventional home mortgage, which is also referred to as the normal home loan, requiring borrowers to pay a 20% home mortgage. 

Either of the above home buying programs comes with a handful of advantages and disadvantages. Scrutinize each option accordingly to find out which of them best suits your requirements.

4.  Work with a Reputable and Licensed Arizona Mortgage Lender

Not all mortgage lenders in Arizona will provide the best service and affordable mortgage rates. In that regard, ensure you evaluate the mortgage lenders carefully so that you are working with a reputable mortgage company. Collect quotes from different mortgage lenders and evaluate who charges affordable rates. 

With the tips I have outlined above, you are off to a good start to begin your journey to homeownership. 

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