Spring is the most common time of the year when people shop for homes. Nonetheless, the spring home-buying season this year could be one of the more competitive in the last couple years. This means prospective home buyers who do not prepare adequately may find themselves in a distressing search.
Many housing markets all over the country have recorded fewer homes that are up for sale due to most existing homeowners not moving, and home builders having constructed fewer new homes. This tight housing inventory will increase the home prices and make things a bit harder for buyers. This is on top of mortgage rates having also been increasing steadily.
All these factors are making it more difficult for many Americans to buy homes. The purchasing process is also more stressful than in previous years. So, if you are a prospective buyer and you would like to buy a home this year, it’s very important to prepare adequately!
Below are some essential steps housing experts recommend.
Getting your finances in order
Unless you have adequate funds to pay for the new house in cash, you need to opt for a mortgage. The process may be streamlined but you will still have to gather numerous documents to help the lender have your accurate financial status.
Have a look at your current credit report and ensure that there aren’t any errors that may affect your credit score before you can start house shopping. Pay off all delinquent bills including other debts you may owe. This way, you’ll have a favorable DTI (debt to income) ratio. Consider using a calculator to know your DTI and then make the necessary changes. You need to look very attractive to the lenders so that they can approve your application, and get you the best rates on your loan.
Find out if you qualify for a mortgage
To be eligible for a mortgage, lenders need to know if you are capable of meeting your monthly obligations. They will ask questions to understand your entire financial status including your salary, investments, employment history, savings, debts or anything else that determines your net worth. You can rely on a pre-qualifying mortgage calculator to know the size of loan you’ll qualify to get depending on your needs.
No matter how strong a candidate you think you are, do not assume you will automatically get a loan with the first lender you encounter. Due to the housing crisis that occurred in 2008, lenders rules have become very strict. You can easily lose out on your dream house if you are not capable of paying off your loan.
Get to know what you can afford
Most buyers find themselves in trouble because of flirting with prices that are vastly unaffordable to their economic situation. Your housing budget should include expenses such as utility payments, insurance, homeowner’s association dues, property taxes and maintenance cost. An excellent rule of thumb is to target a mortgage payment that doesn’t exceed 80% of the amount you pay in rent.
Choose a suitable realtor
Unless you are a seasoned professional, you need to have a realtor. Experienced and knowledgeable agents know how the industry is run including any likely mishaps and how to ensure they don’t happen.
You require more than the willingness to pay for the house to make an offer in a competitive market, which will see this year in the real estate market. If you have a good agent, it will be easy to present your offer, including any other items that will make you look more appealing than any other buyer.
Although the competition is high, you can rely on these tips to get a house this spring no matter how competitive the market becomes.
If You’re Looking At Buying Or Selling, Let’s Talk About What Your Options Are In Charleston.