The housing market is super competitive right now. The rates are lower than they have been in a while, and it seems like people are ready to buy a new home.
Many people may have realized that their current situation isn’t working for them when they were quarantined at home. They may have decided that they need an extra bedroom so that they can continue to work at home. Many decided that now is the perfect time to buy a home, instead of continuing to rent.
However, just because people are ready to buy homes, doesn’t mean that there are many available. Almost every home that gets sold has many offers, and families have to compete to buy the one that they love.
That being said, you need to be ready before you even start looking at homes.
So, what should you do to get ready to buy a home?
Make sure that you are ready. Before you even start to look at home, you need to make sure that you are financially ready to buy one. To do this, you should:
Find out what your credit score is. A good credit score is essential to buy an affordable home. If your score isn’t the best, you may want to work on improving over a few months (or even a year) before you decide to buy a home.
Take care of your debt. Your loan officer will look at your debt-to-income ratio. If you have too much debt, they might not think that you are responsible enough to buy a home. If you have some debt, you may want to take a few months to focus on paying it down.
Know what you can afford. Though the mortgage will be the most expensive thing that you will have to pay, the truth is that it isn’t the only monthly bill that you will have. You don’t want to buy a home that you can’t afford, so you struggle to make all of your other payments. So, look a little further. You are going to have to pay for your electricity. If you don’t have a well and septic tank, you may have to pay for water and sewer.
There is also maintenance. All homes, even brand-new ones, break at some point. For this reason, you should have some extra money set aside for any repairs that you may have to make. It is important that you take all of these extra costs into consideration when you decide how much you can afford for your monthly mortgage.
Start by meeting with a lender. You are going to want to get preapproved before you start looking at homes. If you aren’t, you aren’t going to win against all of the other offers that come in.
It will also speed up your settlement once you do find a home. You will be part-way through your paperwork.
Be prepared to fight for your home. The simple truth is that all good homes get multiple offers in the course of several days. If you are serious about a home, you may end up paying more than you thought.
What shouldn’t you do?
Waive appraisals and inspections. Many people will do anything to win their dream home, including waiving the appraisals and inspections. This isn’t a good idea. You need to know as much as you can about a home before you buy it. You don’t want to get stuck with a home that has major problems that you can’t afford to fix!
Pay more than the home is worth. Because there are so few homes on the market, the truth is that you may find yourself in a bidding war. However, you should never pay more than a home appraises for. Not only will you not be able to get funding for more than your home is worth, but you also may lose a lot of money if the market goes down, and you have to sell.
If you are serious about buying a home, you need to talk to some professionals. You should talk to a real estate professional and a lender to get you started. You are going to need their expertise and guidance to help you find the perfect home for you!