With interest rates continuing to drop and rental prices rising, now is an excellent time to buy a home. The loan approval process can be frustrating, but over the past few years there have been an increased number of loan programs and underwriting changes that have made the process much smoother. If you have considered exploring options for homeownership you need to start acting now. Here are four tips to help get into your first home before spring starts.
Budget Inventory. There is often a big difference in what you want to pay and what you can comfortably afford. Instead of starting with a purchase price or down payment range start by identifying what your ideal monthly payment is. This will help you work backwards and find out how much down payment you need and what price range you are looking at. Doing this first also helps you set a firm limit so you don’t get caught up in the process. It is human nature once you start home shopping to look for bigger and better. Before long you are well over your price range and in turn over your monthly budget. By taking inventory of your budget before you do anything else you will know exactly where you stand and what you can buy.
Get Pre-approved. If you really want to buy you need to know what you are approved for. The process officially starts by getting pre-approved. A pre-approval is a basic check of your credit score, monthly liabilities, income and available down payment. A lender or mortgage broker will take a quick application and review all these items. The biggest change with loan approval in recent years is with the acceptable down payment amount. There are currently programs that require only 3% of the purchase price. It doesn’t take a large down payment to purchase a house.
Make Housing Wish List. There are several factors that go into buying your dream home. If you don’t have a clear vision of what you want it is easy to get pulled in several different directions. It is a good idea to start by making a list of what is important to you. Do you need to be in a certain town or in a specific area? Are you influenced by the school system or recent tax changes? Do you need a yard? How about a fireplace? Do you need to have three bedrooms? It can be difficult finding a house that checks every single box. Most buyers will have to make some concessions along the way. The best way to figure out what you really want is by listing your must haves or items that are non-negotiable. By starting from there it will give your real estate agent a good idea of where to begin their search.
Start Shopping! Find your dream house is a wonderful time but is also fixed with anxiety and frustration. If you are looking for your first home, you need to take your time and find something you love. It is easy to fall for every home you see without looking at the big picture. Lean on your real estate agent and listen to their advice and suggestions. It may take a dozen homes until you find the one you want but don’t settle for something you aren’t passionate about.
If you have been on the fence about buying the time to start looking is now. There is still plenty of good inventory on the market to fit any buyers needs. Before you know it, spring will be here, and you will wonder why you didn’t start earlier. What is holding you back from buying a home in the next 90 days?