Can you believe that is already February?? It seems like every year, the year just goes by faster and faster. And here in the Dallas-Fort Worth area, the buyer season has already started to pick up!
If you or anyone you know has been wanting to buy a home but sat it out last year because of interest rate increases, lack of inventory, or life got in the way some other way, this could be the year.
Even though interest rates increase a few points last year, they have come down over the past few weeks. This could mean a home that was out of reach financially last year could be within your budget this year.
Unfortunately, though, it could also mean more buyers will be out looking for a home as rates continue to go down. Getting started early in the year and even before rates continue to go down more, could help you end up with the home you want for a more affordable price and more favorable terms for you.
Buying a home is a big deal and isn’t something that should happen overnight, so if you are thinking this might be the year to make your move, you’ll want to start planning and preparing early. The best way to get started is to schedule a time to talk here.
The First Step
If you’re a first-time buyer, the best first step is to become educated about the process of buying a home. There is definitely a learning curve that everyone needs to go through in the beginning and that’s why I always like to start with a educational meeting just talking about what’s involved in buying a home.
If it’s your second or third time around, you likely also need to sell too, which means juggling buying and selling at the same time so you don’t end up with two homes or no home. Since there is so much involved with buying and selling at the same time, planning things out well before you want to move is a must. And, again, understanding the process and what needs to happen when is the best first step.
After understanding the high-level overview of what happens when, the next steps are:
Learn about current mortgage loan options. There are so many loan options out there and now is the time to see what is available. I can recommend reputable lenders who have loan programs perfectly suited to your financial situation and goals. These days, getting a mortgage is not a “one-sized fits all” thing. The right lender and mortgage program really depends on your particular situation, how long you are going to own the home and other factors as well.
The most important part of the mortgage piece, though, is truly understanding how your desired monthly payment and down payment equates into the right purchase price for you. Even the most savvy people don’t understand how the math works, but you should before you start looking at homes.
Get to know the market. After you understand the numbers, the next step is to check out certain neighborhoods or homes (even virtually) in terms of cost and features as an “educational” step. This will help you narrow down the location(s) and features that are important to you. That way you’ll be more efficient when you actually house hunt and are ready to buy.
Strengthen your credit score and build credit history. Your FICO credit score is your gateway to a good mortgage since lenders use it to determine your risk as a borrower. So the higher your score, the better your loan options. And, if you’re a couple, then BOTH of you will need to work on your credit!
Know what monthly mortgage payment you can afford. What a lender says you CAN afford can be very different in what you are willing to spend each month. Determine what the monthly payment should be. No one wants to be stretched too much and become “house poor”.
Save for a down payment. Cut expenses and save, save, save right now! No matter if you get a 3% down loan or a conventional 20% down loan, lenders still want to see if you have enough cash reserves in the bank. Remember, owning a home isn’t only its purchase price, but it includes other costs such as taxes, insurance, maintenance, and possible HOA fees. With a larger savings account, a lender knows you’re financially responsible and less of a risk.
As you can see, it’s important to start planning early if you want to buy a home this year. That way you can be ready for “the one” when it comes up. I’m here to help you make it possible. If you are ready to get started, our first step is to schedule a meeting to talk through the steps and create a specific plan for you. You can schedule a time here.
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