With interest rates on the rise – buyers need to know how much home they truly can afford without breaking the bank. If you were one of the lucky ones to have purchased your home before the rise in rates – congratulations! If you are still in the market … adjusting your budget and/or changing your plan up a little may be all you need to do need to achieve your goal of homeownership. Keep in mind – while interest rates are higher than they were 6 months ago, for example – they are only going to be higher in the very near and distant future. So, if your goal is to own a home in 2022/2023 – best to make the move now – while interest rates are still higher than they were before –they will still be lower than what will be looking forward … Make sense?
First step, if you’ve already been pre-approved, you may want to make sure your “pre-approval” is current and up-to date given today’s interest rates, and the prediction of yet another hike. My advice to you is to stay in touch with your mortgage lender so that he or she will be able to guide you through to a successful real estate transaction in this ever-changing market. Some lenders will have different programs that you may qualify for that may lower your interest rate or offer some type of credit – so having that open dialogue with them will only benefit you in the long-term.
To get started, there is a short application process a buyer would need to go through to determine what mortgage they may qualify for based upon their own personal finances. Once completed, this allows the buyer to comfortably start their home search knowing what price range they should be looking in. Best to do this right up front … there’s no sense looking for homes priced in the $500,000 range, for example, when you only qualify for a $400,000 purchase price. Inventory is picking up a little bit these days, homes are staying on the market a little bit longer – thus giving buyers a little more to choose from. That’s all-good news for the buyers! Having said that, and once you finally locate that “place to call home” you still need to be prepared, to put forth your best offer to compete in this market. If you currently own a home, and are looking to upsize or downsize for example, you may have a ton of equity in your current home which is great! Whether you plan to pay cash for your second home or take out a small mortgage – your lender will help you determine as you go through the approval process whether your new purchase will need to be contingent upon the sale of your current home should you do the latter – that’s where things could get a little tricky in this market. But certainly, this happens more then you know. If you do have a home to sell prior to purchasing a second home, having this conversation on day one with a trusted real estate advisor to give you guidance and laying the groundwork on how best to move forward to achieve your real estate goals will be key.
We are still in a competitive market right now, so best be a ready and prepared buyer if you are serious about purchasing a home in this market. If you are currently in need of a good mortgage lender recommendation to get pre-approved – don’t hesitate to reach-out to me. I have many good resources I would be happy to share with you.
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