Is 2022 The Year to Buy A Home?
If you or anyone you know has been wanting to buy a home but sat it out last year because of how competitive the real estate market was here, this could be the year to make it happen.
Even though interest rates inched up slightly, they are still historically low. Plus, since so many people moved last year, the real estate market won’t be as competitive later in the year — what a relief!
Buying a home is a big deal and isn’t something that should happen overnight, so if you are thinking this might be the year to make your move, you’ll want to start planning and preparing early. That way when “the one” pops up, you can make it yours.
The First Step
If you’re a first-time buyer, the best first step is to become educated about the process of buying a home. There is definitely a learning curve that everyone needs to go through in the beginning and that’s why I always like to start with an educational phone call just to talk about your goals and give you a run down of the process.
If it’s your second or third time around, you likely also need to sell too, which means juggling buying and selling at the same time so you don’t end up with two homes or no home. Since there is so much involved with buying and selling at the same time, planning things out well before you want to move is a must. And, again, understanding the process and what needs to happen when is the best first step.
After understanding the high-level overview of what happens when, the next steps are:
Learn about current mortgage loan options. There are so many loan options out there and now is the time to see what is available. These days, getting a mortgage is not a “one-sized fits all” thing. The right mortgage program really depends on your long and short terms goals and financial situation. I can help you with that!
The most important part of the mortgage piece, though, is truly understanding how your desired monthly payment and downpayment equates into the right purchase price for you. Even the most savvy people don’t understand how the math works, but you should before you start looking at homes.
Visit open houses to scope out the local market. After you understand the numbers, the next step is to check out certain neighborhoods or homes (even virtually) in terms of cost and features as an “educational” step. This will help you narrow down the location(s) and features that are important to you. That way you’ll be more efficient when you actually house hunt and are ready to buy. With condos, you’ll also get an idea of monthly HOA fees and amenities in different buildings.
Find out about assistance programs for buyers. Did you know that there are government assistance programs that can make buying a home much more affordable? You’ll be amazed to see what is available for mid-income buyers, first-time buyers, veterans, city or state employees, etc. Programs from local housing authorities can help with down payment or lower interest loans; and many buyers can qualify for this assistance.
Strengthen your credit score and build credit history. Your FICO credit score is your gateway to a good mortgage since we consider it as part of your risk as a borrower. So the higher your score, the better your loan options or terms you may be offered. And, if you’re a couple, then BOTH of you will need to work on your credit!
It can take 6 months or more to improve your score, so start today. Pay your bills on time, don’t take on any large debt, and double check your report for inaccuracies. Remember, you can get a free copy of your credit report here.
Know what monthly mortgage payment you can afford. What you QUALIFY for per month can be very different than what you are willing to SPEND each month. Determine what the monthly payment should be. No one wants to be stretched too much and become “house poor”.
Save for a down payment. Cut expenses and save, save, save right now! No matter if you get a 3% down loan or a conventional 20% down loan, we will always need to verify that you have enough cash reserves in the bank. Remember, owning a home isn’t only its purchase price, but it includes other costs such as taxes, insurance, maintenance, and possible HOA fees. The larger your savings account is, the more financially responsible you will be.
As you can see, it’s important to start planning early if you want to buy a home this year. That way you can be ready for “the one” when it comes up. I’m here to help you make it possible. If you are ready to get started, our first step is to schedule a meeting to talk through the steps and create a specific plan for you. You can schedule a time with Jordan here. You can schedule a time with Ryan here.
I'm Jordan and I love helping first time home buyers make their first home more affordable and stress-free! It all starts with your personal budget and how much you can comfortably afford. Let me know how I can help you make your real estate dreams come true.
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2200 Defense Hwy, Ste 400
Crofton, MD 21114
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