When winter gives way to spring, the temperatures won’t be the only things on the rise. The home-buying market tends to heat up as well during the spring, and 2016 will be no exception. Many savvy buyers will be looking to lock in attractive interest rates while they still remain low. If this group includes you, the time to start preparing is now. These tips will help put you in a better position to find a home that’s just right.
Make your Checklist
First-time home buyers should take the time to determine what their needs are, especially regarding size, location and amenities. But even seasoned home owners will find that having a must-have list can save significant time by helping them avoid listings that may look great in the photos, but in reality, won’t meet their needs. Home buyers should always prioritize the items on their checklists, as most will need to compromise on some items to fit within a realistic budget.
Check Your Credit Score
Even if you’ve purchased a home in the past, stricter credit requirements are making it more challenging for some buyers to find home loans. Lenders are more cautious than ever, so having a favorable credit score can make a difference in your ability to be approved for a loan. Even if you think nothing has changed recently on your credit report, it’s good to check periodically to ensure you aren’t being unfairly penalized for old debts, which can sometimes linger on credit reports. Borrowers with scores in the low 600s and even high 500s can still find lenders who will qualify them, but borrowers should strive for scores in the mid- to upper-700s to land the best rate.
Determine What You Can Afford
Don’t let your maximum loan approval amount dictate what your home-buying budget should be. Though the approval process is more extensive now than it was even just a few years ago, lenders still want to make as much profit as possible. You, however, are the best person to judge what you can realistically afford. Experts say that your total monthly home expenses should not exceed more than one-third of your gross monthly income. You’ll also need to determine how much you’ll need in order to cover any loan fees and closing costs.
Sell Your Current Home
If buying a new home is contingent on the sale of your current home, it’s a good idea to start the process by reaching out and consulting with your realtor. Ask him or her about your best strategy to sell your home quickly, but at the right time and for the best price possible. You’ll want to identify any maintenance issues your home has, and determine if, how and when each one will need to be addressed. You can also ask your realtor if making any upgrades to your current home would be worthwhile and result in a favorable return when it comes time to sell.
For more information about the home buying process, contact your local builders association or visit nahb.org.