If you’re hoping to buy a home this year, here are some tips to help make the process go smoothly. Here are three key moves to make.
1. Set a budget
Even though housing inventory could pick up this spring, you should expect home prices to remain high. You’ll need to establish a price range that works for your budget so you don’t end up taking on too large a mortgage.
Spend some time crunching mortgage numbers to see how much house you can afford, keeping in mind your existing debts and obligations. As a general rule, you should aim to keep your housing costs to 30% or less of your take-home pay. If you’re buying a home, that 30% should include not just your mortgage payment, but also your predictable associated costs, like property taxes, homeowners insurance, and HOA fees, if those apply to you.
2. Get pre-approved for a mortgage
You could end up facing some competition if you aim to buy a home this spring. But going in with a mortgage pre-approval letter could give you an advantage over other buyers.
One risk sellers take on is having a deal fall through because the buyer can’t secure financing. But if you come in with a pre-approval letter, any seller you make an offer to will know your finances have already been vetted by a mortgage lender, and financing is less likely to be an issue for you.
Plus, having a pre-approval letter will give you a sense of how much you’ll be able to borrow for home buying purposes. And that could help you embark on a more focused search.
3. Aim to be flexible
While we can hope that housing inventory will increase this spring, that’s not guaranteed to happen. If inventory stays sluggish, you may end up needing to make some compromises, like purchasing a home that’s less updated than what you’d like.
Do your best to be open-minded, especially if you don’t have the highest home-buying budget. As long as you find a home that meets your core needs, you can always upgrade kitchen countertops or redo bathroom tile down the line, as time and money allow for.
Spring tends to be a popular time to list a home, and hopefully, that will hold true this year. If you’re hoping to become a homeowner soon, employ these tips for a successful search.
About Danielle Verboski