Low mortgage rates are attracting homebuyers in large numbers. According to the Mortgage Bankers Association, applications in the first week of March for loans from families buying a home this spring were up 30 percent from the year before. Meanwhile, according to the National Association of Realtors, the number of homes for sale is lower than last year. In short, the competition is going to be intense, especially for homes within reach of first-time buyers.
The HomeOwnership Center has a few tips for homebuyers this season, that if followed will help smooth what is a complicated, and often frustrating process.
Step 1: Consult a Homeownership Advisor for Guidance and Advice.
You don’t want to search for a home unprepared. Knowing the numbers that matter when buying a home is extremely important to save time, frustration and lead to the best choice. More than two-thirds of consumers in a NeighborWorks America survey said that the home buying process is complicated. Demystify the process by consulting with one of the HomeOwnership Center’s housing advisors.
Our staff are certified professionals who can walk you through the different types of mortgages and interest rates; the effect credit scores have on being approved for a loan, how much down payment is needed for purchase, and how much home is really affordable to you.
Step 2: Build a Budget
Knowing your numbers is one thing, having the road-map to get you there is another. There’s no better tool to chart your course than with a budget. National surveys have shown that less than one-third of consumers have a budget. Going into this home buying season with a budget that includes potential changes in commuting costs after purchase, home maintenance expenses, and even estimates for changes in life circumstances such as becoming a parent or paying for college, will give you a leg-up on the competition and provide peace of mind.
Once all the numbers are on the table, it’s easier to see what type of home suits a family’s budget and needs, what might be necessary financial trade-offs, and what could be a direct line to trouble.
Step 3: Be Determined and Informed
Finding the right mortgage and the right home takes time, and it’s natural to want to shorten the process. However, making a winning bid on a home that isn’t right, and cutting corners to do so, could lead to trouble. For example, forgoing a home inspection to speed things up, or not fully understanding the terms of the mortgage are ingredients for problems down the road.
Following these three steps will help ensure homeownership success this season and for the long run.