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From Renter to Owner: Our Guide for First-Time Home Buyers

Buying a new home is such a rewarding accomplishment, especially if you’re a new buyer going from renting to owning. As you think about taking that big leap to home ownership, you’re sure to have tons of questions racing through your head. Luckily, JC Jackson Homes has helped many first-time home buyers navigate that exact transition. We’re happy to be a source for new buyers and answer some of the questions that might be on your mind. Let’s go!

5 Questions Renters Might Ask Before Buying a Home

1. How much money do I need up front?

Buying a home will certainly have different upfront costs than renting. Though you may already know to save for a down payment or a builder’s deposit, there are other costs to consider. At JC Jackson, for a home in one of our communities, we require a builder’s deposit of $4,000 or the total additional approved Luxury Choice Options, depending on the amount. Other costs include closing costs, and cash reserves.

Saving money for a new home

Closing Costs – Typically 2% to 5% of the price. It includes various fees. Most of the fees are used to pay the lender and title company for everything needed to set up and approve your loan. This cost is in addition to the down payment/builder’s deposit.

Cash Reserves – This won’t always be required depending on the type of loan you choose, how much you put down, and your credit score. If needed, it’s a certain amount of savings set aside to cover anywhere from 0 to 6 months of your mortgage payments to show you have a safeguard in case of financial troubles after closing.

2. How do I get preapproved for a loan?

Getting preapproved for a loan is all about your financial credibility. Lenders are taking a risk when lending you money so they want to ensure you can afford to pay them back. They’ll look at things like your credit score, debt-to-income ratio, and income.

With that in mind, the best way to get preapproved for a loan is to consider these items and look deep into your personal finances. Check your credit score and dispute any errors or try to improve it if it needs work. If your debt is more than 36% of your annual income, try paying some of it down. Lenders will ask for proof of your financial and personal information before getting preapproved, so you’ll want to prepare financial documents (ie. pay stubs, tax returns, and bank statements) and personal documents (ie. driver’s license and social security number).

3. Will my student loan debt be an issue?

does Student loan debt affect homeownership

The short answer is not really. Many people buy homes and have student loan debt. It’s just a matter of how much it affects your overall debt-to-income ratio. Your monthly student loan payments are partly what lenders will look at in comparison to your income. Check if your monthly payments, along with other debts, are taking up a large portion of your income. If so, you may be able to tackle those other debts first or find ways to increase your income to help your ratio. However, if it’ll be too straining with the addition of a mortgage, you may want to focus on paying it down. There are also many debt-to-income ratio calculators you can use to see where you’re at currently before making a decision.

4. Will my landlord be contacted?

Lenders don’t typically contact your landlord directly, but they may request from you proof of rental history to see how consistently you’ve been paying your rent on time. It’s another way for them to confirm you’ll be a responsible borrower. Most underwriters (the people who review mortgage applications) will use bank statements to check for these payments. Your rental history can help or hurt your loan application depending on you and how consistent you’ve been with payments.

5. How soon can I move from my rental to my new home?

When can i move into my new home

Once the home is completed, the mortgage approved, the paperwork signed, and you’ve been handed the keys, you can move in right away. This is mainly true with new construction builders like JC Jackson. 

JC Jackson Can Help with Your Home Financing

Many first-time home buyers can become overwhelmed learning everything about how to buy a home. But with JC Jackson Homes, we understand it’s a big step, and don’t take your home-buying journey lightly. We work hard to ensure you feel comfortable and confident every step of the way, especially when it comes to home financing as this can seem like the most daunting part. Fortunately, we have over 75 years of experience and the knowledge needed to choose the best lending partners. We’ve made sure our preferred lenders share our values, are trustworthy, and want to help you with financing a home in the way that fits your situation. Whether it’s a construction loan or a traditional loan, we have excellent options for you to work with.

First-time home buyers can also take advantage of our online mortgage calculator to test different home prices and estimate their mortgage payments.

Contact us Today!

We’d love to help make your dreams of going from renter to owner a reality. With JC Jackson, you can live within one of our established communities or build on your land in Coastal North Carolina. Check out the communities and floor plans on our website and let us know if you have any questions or would like to get started. 



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