18 useful steps for moving out of your parents' house

Have you been thinking about leaving the house you grew up in and starting a life of your own? It’s understandable if you have. Moving out of your parents’ house can be an exciting and rewarding experience. But before you make such a life-altering decision, it’s important to know how to move out of your parents’ house the right and responsible way – especially if you plan on buying a house.

How do you know if you’re ready to move out and buy your own home? And if you are, what important factors should you consider? Read on to learn how to successfully move out of your parents’ home.

1. Determine that you’re ready to move out

Before making any hasty moving plans, it’s crucial to determine whether you’re ready for the commitment that comes with homeownership.

The U.S. Department of Housing and Urban Development's (HUD) Office of Policy Development and Research (PD&R) explains, “Prospective home buyers often do not know or understand their financing options, and homeowners can encounter unexpected costs, struggle to maintain their initial payment plans, and encounter foreclosure rescue scams.”

To avoid these potential pitfalls as a first-time home buyer, it’s ideal to have the following:

• A stable source of income and employment: Since the average mortgage loan term is 15 – 30 years, a lender will want to see evidence of stable income, such as pay stubs and W-2s, and a solid work history.

• A qualifying credit score: Your credit score assesses the risk involved with giving you a loan. Most lenders require a minimum credit score of 580 to obtain a home loan. However, a score above 720 is likely to give you the best loan terms.

• Minimal or no debt: If you have a lot of debt, it can be difficult to get a loan, making your loan more expensive. You may want to pay off your debt or pay it down before adding on the cost of homeownership.

• A thorough knowledge of the costs of homeownership: Homeownership is much more than a monthly mortgage payment. Before buying a home, consider the down payment, cost of insurance, property taxes, closing costs, utilities, maintenance and other expenses.

2. Discuss your decision with your family and friends

So, you’ve determined that you’re ready for the financial responsibility that comes with homeownership. What should you do next?

It may be helpful to tell your parents and other loved ones about your decision. Your loved ones may express concerns about how moving out could affect your safety and overall well-being. They may also worry that you’re not ready to take such a big step.

If this happens, it could be a good idea to share your plans for living safely and responsibly. By keeping your loved ones informed, they may be more willing to provide any needed help, and you can also lean on their experience.

Moving out of your parents’ house can also impact your relationships. Your parents and other important people in your life may miss you or fear negative relationship changes. For this reason, think about how you’ll stay connected with your loved ones after you move. Perhaps set aside time each week to call or visit them!

3. Set a deadline for your move

Once you’ve told your family and friends of your decision, it’s time to start thinking beyond the hypothetical. Setting a deadline for moving out is an effective way to advance the moving process.

When should you move out? That will depend on your unique situation. If you’re buying a home, you’ll want to think about factors such as the time of year, current housing market conditions, availability of homes and events in your personal life.

4. Calculate your budget

As we’ve already discussed, moving out — and buying a home — requires a great deal of financial planning. So, you’ll likely benefit from figuring out how much you can afford to spend each month.

This is especially true when buying a house. It’s important to consider how a monthly mortgage payment will fit into your budget. You’ll also need to account for a down payment and closing costs, which we’ll discuss a bit later.

To calculate your budget, track your monthly expenses and then compare that figure with your monthly income. This can help you determine how much house you can afford and set a target monthly payment.

Making an honest assessment of your budget can help you to decide whether to pay off debt or save for a house.

5. Research where you want – and can afford – to live

There’s no shortage of amazing places to live. So understandably, you might be unsure about where you want to live and which place fits into your budget. To narrow it down, you may want to ask yourself questions like:

• Will I be able to find a job that supports my livelihood? Are there opportunities for career growth here?

• What goods and services do I need close by?

• What is the cost of living and housing?

• How close do I want to be to family and friends?

• What cultural and social aspects are important to me?

This is by no means an exhaustive list, but it’s a way to examine what’s important to you and determine if a prospective place will align with your needs.

6. Start saving for a down payment and closing costs 

The next step to moving out of your parents’ house is crucial, and that’s making sure you’ve saved enough money to cover two of the one-time, upfront expenses you’ll encounter when buying a home – a down payment and closing costs.

Down payment

A down payment is the price you’ll pay upfront when you close your home loan. You can expect to pay at least 3% of your property’s purchase price. Your down payment amount will usually depend on the type of mortgage you choose, your financial situation and the type of property.

Saving for a down payment can be challenging if you’re a young adult who’s buying a home for the first time.

Paul Sundin, certified public accountant and CEO of retirement services company Emparion, says, “For young adults who [have a newfound control] over their finances, the hardest part will be adjusting their spending habits to save for a down payment. Regardless, this is a prerequisite and a defining factor on whether or not buying a home will be possible.”

To save for a down payment, Sundin advises young adults to consider cutting costs in any way possible. He suggests using coupons to save on groceries and looking into options for adjusting current payment plans. This includes items such as your car insurance, renters insurance, health insurance, cable, internet or cell phone plan.

Closing costs

You can also expect to pay your lender processing fees, otherwise known as closing costs. Typically, closing costs will be 3% – 6% of your loan amount. For example, if your home costs $300,000, you’ll probably pay somewhere between $9,000 – $18,000. This amount will vary based on several factors, including loan type, which we’ll dive into soon.

Down payment and closing costs are just two elements to consider. First-time home buyers should also be prepared for other home buying costs like property taxes, utilities, maintenance and more.

7. Begin building up your credit

Your credit score is a three-digit number that reflects your credit history. A high credit score – usually 700 or above – can help you get the best loan terms when buying a house.

If your score isn’t where you’d like it to be, focus on the following:

• Pay your credit card bill on time

• Reduce your debt

• Avoid applying for new credit

8. Contribute to your emergency fund

Even if you're well-prepared for your move, unexpected events can make living on your own harder. If you happen to lose your job or incur a major expense, it’s important to have an emergency fund.

An emergency fund is the money you set aside in case of an unforeseen event. It’s best to refrain from using this money unless absolutely necessary. So, if tough times come, you’ll have funds available until you get back on your feet.

Before moving out and living on your own, consider growing your emergency fund. Although the size of an emergency fund will vary based on the individual, generally it should contain enough to cover 3 – 6 months of your living expenses.

9. Consider your mortgage options

Getting a mortgage is an important part of the home buying process, so be sure to research your mortgage options as well as the qualifying credit score and required down payment for each type of home loan.

Let’s briefly discuss some of your home loan options.

Conventional loans

Many home buyers opt for a conventional loan. This is a mortgage loan that’s not backed by a government agency; instead, it’s funded by a private financial lender and is then usually purchased by a government-sponsored enterprise like Fannie Mae and Freddie Mac.

The requirements for conventional loans vary, but they're usually more strict than with government-backed loans like Federal Housing Administration (FHA) or U.S. Department of Veterans Affairs (VA) loans. For starters, you’ll usually need a credit score of 620 or more to qualify.

Some first-time home buyers can qualify for a down payment as low as 3% with this type of mortgage. However, with a down payment of less than 20%, you’ll add private mortgage insurance to your monthly payment until you reach 20% equity.

FHA loans

Unlike conventional loans, an FHA loan is backed and insured by the Federal Housing Administration. Since this is the case, the requirements for this type of loan usually aren’t as strict.

FHA loans have low down payment options and lower minimum credit score requirements, which may appeal to first-time home buyers. However, you’ll have to pay a mortgage insurance premium for the life of the loan unless you make a down payment of at least 10%, in which case the premium will come off after 11 years.

VA loans

A VA loan is another type of government loan. Backed by the U.S. Department of Veterans Affairs, this type of loan is available to eligible veterans, service members and surviving spouses.

VA loans don’t require down payments. There’s also no monthly mortgage insurance, along with lower interest rates and no specific minimum credit score. However, the minimum median credit score for a VA loan from Rocket Mortgage^® is 580.

USDA loans

A USDA loan, backed by the U.S. Department of Agriculture, provides affordable homeownership opportunities for borrowers interested in purchasing a home in a rural area. If you qualify for this type of loan, you don’t have to make a down payment and will likely pay lower interest rates. However, you’ll still need to pay closing costs.

Rocket Mortgage does not offer USDA loans.

10. Get preapproved

An important step when buying your first home is getting preapproved for a mortgage. A lender will assess your income, assets and credit score to determine how much money you can borrow.

Your debt-to-income ratio (DTI) is also an important factor in the preapproval process. Your DTI is a percentage calculated by adding up your monthly minimum debt payments and dividing it by your gross monthly income. Lenders want to make sure you’re financially capable of taking on debt, so they’ll be looking for a lower DTI.

A mortgage preapproval makes it easier to shop for a home, but you’ll still need to get fully approved once you find a house and give your lender a purchase agreement.

11. Find a real estate agent or REALTOR®

It’s no secret that buying a home involves a lot of moving parts. So, to make things easier for you, consider hiring a real estate agent or REALTOR^®.

Real estate agents and REALTORS^® are both licensed professionals who guide buyers and sellers through real estate transactions. They can help you in the following ways:

• Provide you with expert knowledge of the location in which you want to purchase a home.

• Provide you with information on a variety of homes for sale that fits your needs via the multiple listing service (MLS).

• Negotiate a home’s price, repairs, replacements and more.

• Assist with paperwork and the closing process.

“Conducting a real estate sale can be overwhelming if you lack the expertise and experience, making it much harder to be successful,” says Shania Patrick, a licensed real estate agent based in Michigan.

Patrick goes on to explain: “Real estate agents represent their clients with their best interest in mind and are committed to providing the best possible outcome. Your real estate professional can provide the necessary resources and education in financing, marketing, and building real estate connections.”

If you think you could benefit from a professional’s help as you search for your first home, consider working with our friends at Rocket Homes^SM to find an agent who’s right for you.

12. Shop for your new home

Shopping for a new home can be one of the most exciting parts of moving out. But before you start house hunting, it’s helpful to know what the process entails.

Your house search will generally consist of the following steps:

• Determining your budget and get preapproved

• Making a checklist of your must-haves and dealbreakers

• Checking house hunting websites and apps

• Connecting with a real estate agent or REALTOR^®

• Seeing houses in person

13. Make an offer on your new home

Once you’ve found the right home for you, it’s time to make an offer! The process of making an offer will vary for each buyer. But usually, you’ll want to:

• Decide how much you want to offer

• Decide on any contingencies

• Draft your offer letter

After making your offer, you can usually expect to hear back in 1 – 3 days. Then, the closing process typically takes anywhere from 30 – 45 days.

14. Pack – and declutter – your belongings

Even the thought of packing your belongings for the move can be overwhelming. To make packing less stressful, break down the process into smaller projects. Focus on one room at a time, organizing and decluttering as you go. You may even find it helpful to create a “keep,” “sell,” and “donate” pile to avoid bringing excess items into your new home.

15. Coordinate your moving plan

We know that moving can be stressful. But having a moving plan is a good way to make the process a bit easier. You’ll want to prepare at least a few months in advance for your move. Consider making a moving checklist to stay organized and ensure you’ll have everything you need for the big day.

You’ll also want to know how much your move will cost. While moving costs vary based on the specific situation, Homeguide.com says a full-service move can cost anywhere from $850 to $20,000, depending on number of bedrooms, distance traveled, and add-ons.

If you plan to hire movers, you’ll want to account for that expense in your overall budget. If you’d like to save money and move on your own, be sure to rent a moving truck and enlist family and friends to help.

16. Update your address and set up your utilities

During the moving process, you may overlook some of the smaller but necessary tasks. About a month before your moving date, make sure to notify your utilities and other service providers of your address change.

Remember to contact:

• Electricity and gas providers

• Water and sewage treatment providers

• Internet, phone and cable providers

• Medical and dental service providers

• Home, auto, life and other insurance providers

• Banks and credit card companies that mail your statements

• Your children’s schools

• Newspaper, magazine and other subscription providers

• Home alarm system providers

You’ll also want to alert the U.S. Postal Service of your address change to receive mail at your new home.

17. Furnish and settle in your new home

It can be exciting to think about how you’re going to furnish your new home. Maybe you’ve even been shopping for decor that’ll create a certain aesthetic. But when you first move in, it’s important to buy the essential items first.

You’ll likely need items like cleaning and home maintenance supplies, toiletries, groceries, kitchen appliances, furniture and more.

There are often things you forget, so be sure to consult our moving checklist to make sure you’ll have everything you need for the move.

18. Keep in touch

While you want to enjoy your newfound independence once you move out of your parents’ house, you’ll likely want company at your new place from time to time.

The good news is that there are plenty of ways to stay connected no matter where you live. You might consider calling, texting or video chats to check in with your loved ones. If you live close, why not make plans to hang out in person? And if you now live farther away, arrange a time to visit if possible.

The bottom line

Moving out of your parents’ house is a milestone that can be rewarding but also a bit scary. If you follow the practical steps we’ve discussed in this article, you may be well on your way to living the independent life you’ve always dreamed of.

If you’re ready to take the leap and buy your first home, take action and start your mortgage application with the Home Loan Experts at Rocket Mortgage.