Buying a house while still renting is more common than you think. Many tenants want to start searching for their homes before the lease ends, whether they buy a home in Sacramento, California or in Austin, Texas. This balanced act is renting while buying a home, and there are unique challenges, from managing overlap costs to deciding whether to stay monthly or buy a home before the lease is over.
In this Redfin article, you will learn how to buy a home while renting, strategies to make the process easier, and common mistakes to avoid.
What does it mean to buy a house while renting?
Buying a home while renting means keeping your apartment lease active while searching for and closing your home. Instead of moving in before securing your property, keep your rentals in place to ensure you have a stable home during the process.
Why rent a house when you’re buying it?
Flexibility: You don’t put pressure on buying the first home you see. Housing Security: If closing takes longer than expected, you won’t be left without a place to live. Safe: You can focus on searching for your home without worrying about short-term homes.
Some buyers will consider moving with their families or using temporary housing, but staying on rental usually offers more independence and consistency.
Can I buy a house before the lease ends?
Yes, it can, but it takes a plan. The biggest challenge is to cover both rent and new housing costs at the same time. You may also face timing issues if your lease is not in line with the deadline.
How do lenders view tenants who buy a house?
Lenders do not consider a rental to be negative when applying for a mortgage. They focus on:
Rent payments usually don’t increase your credit score, but it can enhance your application by showing a strong record of on-time payments. A key concern for lenders is whether their budgets can handle overlapping rent and mortgage obligations during the transition.
While you have the flexibility to buy the advantages of rentals while purchasing rentals, you can avoid rushing to your first home over time, saving your down payment and covering the ability to cover the closing costs for adjusting the timeline between the end of the closing date and notifications.
Tip: If you are wondering how to buy a home before the lease goes up, check the terms of the lease early. This helps you understand whether notification requirements, fees, or monthly flexibility is optional.
Break lease to buy a house
Some lessees have decided to close their leases early to proceed with the purchase. This comes with a penalty like this:
Before breaking your lease, carefully review the terms of your rental agreement and speak to your landlord. Rules and penalties vary by state and lease, so check what applies to your situation. Terminating a lease may mean extra costs, but it is worth considering whether you find a suitable home and not risk losing it.
How to Buy a House When You Rental: 6 Steps
1. Check the lease agreement
Check your lease carefully before starting the home buying process. Look for early termination clauses, sublet options, and the required notification period. These details are important if you are purchasing a home before the lease ends. This is because you can break the lease without knowing that the rules can lead to unexpected penalties and fees.
2. Plan your finances
Buying a home while still renting means carrying two sets of housing costs in at least a short period of time. To avoid surprises, build a budget to cover.
Save Down Payment: Keep contributing to the fund while you pay rent. Overlap Cost: Prepare for a month or two, paying both your rent and mortgage at the same time. One-time fees: Includes closure fees, transportation fees and utility deposits. New Homeowner Cost: Property Tax Homeowner Insurance (often required by lenders) Maintenance and repairs, both routine and unexpected utilities must track and pay for themselves
Your credit score is another important part of your financial preparation. The higher your score, the better your mortgage options. Enhance your profile by paying your bills on time, keeping your debts low, and ensuring your rent payments are up to date.
Tip: If you’re not ready for a full purchase, consider the rental option. You can gradually transition from renters to homeowners, while increasing costs.
3. Get pre-approved for your mortgage
Pre-approval shows you a serious seller, even if you are 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 properties appear.
4. Adjust the lease end date in the closing timeline
Timing is everything. Decide whether you prefer short overlap pay wages and mortgages at the same time, or whether you want to move consecutively to determine the schedule you moved. A little overlap provides a breathing room, but a direct switch can save you money, but you can feel in a hurry. If your lease ends immediately, ask about monthly flexibility. This gives you extra time to close your new home.
5. Communicate with your landlord
Once your purchase plan is clear, let your landlord know. Enquiries about appropriate notices, flexible arrangements, or negotiations for early lease termination can help you avoid penalties. Co-op landlords can make the transition smoother and reduce costs.
6. Preparing Mobile Logistics
Plan the move in advance. If your lease ends before the deadline, consider storage, short-term rentals, or temporary stays with friends and family. Booking a mover with a flexible schedule can also help minimize costs if the date changes unexpectedly.
Common mistakes to avoid
Even the best plans are easy to overlook important details when buying a home while renting. Be aware of these common mistakes:
Underestimated overlap costs: Forgetting your period budget for both rent and mortgage can create financial burdens. Breaking the lease without understanding the penalty: Early termination fees, paying rent until a new tenant is found, or losing your deposit is all possible costs. Forgetting Moving in Costs: New homeowners often overlook utility, setup fees, or insurance costs and initial maintenance deposits. House hunting before budgeting: Many first-time buyers fall in love with their home before they realise what they can afford. Always meet with your lender first and if savings are difficult, explore down payment assistance or first-time home buyer programs. Not shopping smart: running into the first house you see can lead to regret. Tour open houses, ask lots of questions and learn which compromises are willing to make. Once notified, you will avoid the buyer’s regret and stay within your budget. Skip or hurry up the inspection: As a tenant, the landlord usually has a small problem. However, as a buyer, repairs are your responsibility. Always take your tests seriously and consider a specialized check. For example, inspect crawl space, mold, or lead-based paint inspections in older homes. Having problems early can save you from unexpected costs in the future.
FAQs about renting an apartment and buying a house
Can I buy a house before the lease is over?
Yes, but unless your landlord allows flexibility, you may face charges or penalties.
Is it better to rent from the moon to the moon when hunting for a house?
Yes, you can adjust to the flexibility of closing the travel date.
If you rent while purchasing, will your lender be concerned?
No, lenders focus on income, credit, debt to income ratios, not rental status.
Should you break the lease early to buy a house?
Only if the cost of breaking a lease is less than the risk of losing your home.
