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Buying a home while still renting is more common than you might think. Many renters want to start their home search before their lease ends, whether it’s buying a house in Sacramento, CA, or a home in Austin, TX. This balancing act, renting while buying a house, comes with unique challenges, from managing overlap costs to deciding whether to stay month-to-month or buy a house before your lease is up.
In this Redfin article, you’ll learn how to buy a house while renting, strategies to make the process easier, and common mistakes to avoid.
What does buying a house while renting mean?
Buying a house while renting means keeping your apartment lease active while you search for and close on a home. Instead of moving out before you’ve secured a property, you maintain your rental so you have stable housing during the process.
Why rent while buying a house?
- Flexibility: You’re not pressured to buy the first house you see.
- Housing security: If closing takes longer than expected, you won’t be left without a place to live.
- Peace of mind: You can focus on the home search without worrying about short-term housing.
Some buyers consider moving in with family or using temporary housing, but staying in your rental usually offers more independence and consistency.
Can you buy a house before your lease ends?
Yes you can, but it takes planning. The biggest challenge is covering both rent and new home costs at the same time. You may also run into timing issues if your lease doesn’t line up with your closing date.
How lenders see renters who are buying a home
Lenders don’t see renting as a negative when you apply for a mortgage. They focus on:
While rent payments don’t typically boost your credit score, showing a strong record of on-time payments can strengthen your application. The main concern for lenders is whether your budget can handle overlapping rent and mortgage obligations during the transition.
| Pros of renting while buying | Cons of buying while renting |
| Flexibility to take your time and avoid rushing into the first house you see | Paying rent while also saving for a down payment and covering closing costs |
| Ability to align timelines between your lease ending and your closing date | Lease overlap and notice periods can make timing difficult |
| More control over your moving schedule, without being forced into temporary housing | Risk of breaking a lease if you need to move before the agreement ends |
Tip: If you’re wondering how to buy a house before your lease is up, review your lease terms early. This helps you understand notice requirements, fees, or whether month-to-month flexibility is an option.
Breaking a lease to buy a house
Some renters decide to end their lease early to move forward with a purchase. This can come with penalties, such as:
Before breaking a lease, carefully review the terms of your rental agreement and speak with your landlord. Rules and penalties vary by state and by lease, so check what applies to your situation. While ending a lease may mean extra costs, it could be worth considering if you’ve found the right home and don’t want to risk losing it.Pros and cons of buying a house while renting
How to buy a house when you’re renting: 6 steps
1. Review your lease agreement
Before you start the home buying process, review your lease carefully. Look for early termination clauses, subletting options, and required notice periods. These details matter if you’re buying a house before your lease ends, since breaking a lease without knowing the rules could lead to unexpected penalties or fees.
2. Plan your finances
Buying a house while you’re still renting means carrying two sets of housing costs, at least for a short time. To avoid surprises, build a budget that covers:
- Down payment savings: Keep contributing to your fund while paying rent so you don’t fall short when it’s time to close.
- Overlap costs: Be prepared for a month or two of paying both rent and a mortgage at the same time.
- One-time expenses: Include closing costs, moving expenses, and deposits for utilities.
- New homeowner costs:
- Property taxes
- Homeowners insurance (often required by lenders)
- Maintenance and repairs, both routine and unexpected
- Utilities you’ll now need to track and pay yourself
Your credit score is another key part of financial readiness. The higher your score, the better your mortgage options. Strengthen your profile by paying bills on time, keeping debt low, and making sure your rent payments are current.
Tip: If you’re not ready for a full purchase, consider a rent-to-own option. It lets you transition gradually from renter to homeowner while spreading out costs.
3. Get pre-approved for a mortgage
Pre-approval shows sellers you’re serious, even if you’re still renting. It also helps you set a realistic budget and align your home search with your lease timeline. Knowing exactly what you can afford gives you confidence to move quickly when the right property comes along.
4. Coordinate lease end date with closing timeline
Timing is everything. Decide whether you’d prefer a short overlap paying rent and mortgage at the same time or a back-to-back move-out and move-in schedule. A little overlap provides breathing room, while a direct switch saves money but can feel rushed. If your lease is ending soon, ask about month-to-month flexibility, which can give you extra time to close on your new home.
5. Communicate with your landlord
Once your buying plans are clearer, let your landlord know. Giving proper notice, asking about flexible arrangements, or negotiating early lease termination can help you avoid penalties. A cooperative landlord can make the transition smoother and less costly.
6. Prepare for moving logistics
Plan ahead for the move itself. If your lease ends before your closing date, consider storage, short-term rentals, or staying with friends or family temporarily. Booking movers with flexible schedules can also help minimize costs if dates shift unexpectedly.
Common mistakes to avoid
Even with the best planning, it’s easy to overlook important details when buying a house while renting. Watch out for these common mistakes:
- Underestimating overlap costs: Forgetting to budget for a period of paying both rent and a mortgage can cause financial strain.
- Breaking a lease without understanding penalties: Early termination fees, paying rent until a new tenant is found, or losing your security deposit are all possible costs.
- Forgetting move-in expenses: New homeowners often overlook deposits for utilities, setup fees, or the cost of insurance and initial maintenance.
- House hunting before budgeting: Many first-time buyers fall in love with a home before figuring out what they can realistically afford. Always meet with a lender first and explore down payment assistance or first-time homebuyer programs if saving is difficult.
- Not shopping smart: Rushing into the first home you see can lead to regrets. Tour open houses, ask plenty of questions, and learn what compromises you’re willing to make. Being informed helps you avoid buyer’s remorse and keeps you within budget.
- Skipping or rushing the inspection: As a renter, small issues usually fall on the landlord. But as a buyer, repairs are your responsibility. Always take the inspection seriously and consider specialty checks. For example, inspecting the crawl space, mold, or lead-based paint inspections in older homes. Catching problems early can save you from unexpected costs down the road.
FAQs about buying a house while renting an apartment
Can you buy a house before your lease is up?
Yes, but you may face fees or penalties unless your landlord allows flexibility.
Is it better to rent month-to-month when house hunting?
Yes, it gives you flexibility to align your move-out date with closing.
Do lenders care if you’re renting while buying?
No, lenders focus on income, credit, and debt-to-income ratio, not rental status.
Should you break a lease early to buy a house?
Only if the cost of breaking the lease is less than the risk of losing the home.
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