According to the Chief of the National Association of Realtors, the growth of the U.S. housing market is projected to carry on in 2021. The median house price is expected to rise by 3% while sales are expected to jump to 9%. This means that home prices are at no risk of dropping next year, and home sales are expected to increase. It also means those homebuyers will be competing for a limited number of units while mortgage rates hold steady close to historic lows.
Perhaps this comes as a warning call that you should not delay any further. But before you rush into making any hasty decisions, here’s what you should consider.
What is Your Credit Score?
Mortgage lenders will always start by checking your credit score, so you should review all your credit reports and confirm that they are accurate before the home buying process begins. Ideally, it’s best to get a credit report at least 12 months before you start the application process. This helps to ensure you have ample time to do any amendments and improve your credit score if necessary.
What is Your Budget?
It’s important to ensure you have a clear picture of what you can afford before you start the home buying process. The latest real estate market survey estimates indicate that home prices are projected to increase by approximately 5.7% on top of this year’s already high levels. Additionally, mortgage rates are expected to tick up gradually on the backdrop of strong demand and a recovering economy. Keep these factors in mind as you prepare your budget. You should also try to calculate essential metrics like your debt-to-income-ratio when putting together your budget since this is one of the key metrics that lenders use to assess borrowers.
Do You Need to be Pre-approved?
Getting a loan pre-approval can help to make the home search and buying process less stressful. When you are pre-approved, you have a pretty good idea of what you can afford and you can easily narrow down your options. Getting pre-approved lets home sellers to know you are a serious potential buyer and it gives you an edge against other buyers, especially when the market is competitive. To give you a better picture of what you’re up against in terms of competition, the latest estimates indicate that roughly 8.3 million first-time homebuyers will enter the U.S. market by 2022. The second thing you should do when starting the process of buying a property is to use a mortgage calculator. Why? Read on…
When you are pre-approved for a mortgage you will receive an amount that the lender is willing to lend you. It’s an estimation and not an actual value. Interest rates, lending criteria, and other variables could change once you begin the application process, which means your pre-approval amount may too. So, why are mortgage calculators so important?
The Importance of Mortgage Calculators.
The fact that you need one might actually surprise you, but this one little tool such as MortgageCalculators.info can save you from so many problems over time. And if you are going to invest in your future, which is what buying a house brings with it, you need to be sure you get everything just right. When you buy a home, there are a lot of factors that come into play, and without a mortgage calculator, you might end up spending too much or even underestimating your ability to borrow.
Do Some Research
Once you have a clear picture of what you are looking for in a home, check the papers and browse through real estate sites. This will help you get an idea of what type of homes with the features you want are selling for in the different neighborhoods you’re interested in. it will also help you gauge if the sellers are selling lower or higher than the selling price. Once you already know the sales prices of houses comparable to what you are trying to find, you’ll be in a better position when it comes to making your offer.
The New Year is normally a time for many people to hit the refresh button and start on a clean slate. It is also the perfect opportunity to make an effort to achieve an ongoing goal you may be having. If purchasing a home has been one of your ongoing goals, start using these tips to become a homeowner in the New Year.
