Will You Become a Homeowner In 2018?!
As an investor, it is exciting to see that consumer confidence has increased tremendously over the last couple of years. It offers us a wider range of access to capital as there are more lenders in a buyer friendly market. For those of us who rehab, it also offers us greater assurances that our newly renovated properties will sell quickly. As a real estate professional, I really want to encourage why this is the season to BUY yourself some real estate!
Interesting in buying a home while interest rates are low and lending is available? Here are 4 Easy Tips for you to consider as you prepare for your purchase.
1. SAVE MONEY!
I know that bitcoin investments are attractive right now, but there is nothing wrong with planning your investment toward the downpayment of your home using a vehicle that is more traditional and sound. Whether it is bi-weekly or monthly, set aside a reasonable and affordable amount toward your goals. When purchasing a home, there are common expenses you should prepare for:
Your Down Payment - your down payment is normally 3% - 5% of the total purchase price of the home. Fortunately, this expense will count as a credit toward the housing cost. Preparing for this expense allows you to take your dream house off of the market!
Your Closing Costs - your closing costs is also another expenses that comes with purchasing a home. Typically 2% - 3% of the total price of the transaction. There are some upside to this expense however. You pay it once you are ready to purchase the home & it is not unreasonable to ask the seller for assistance to close.
Your Moving Cash - with a new home comes new expenses. Having funds available to ready your home for your family makes for an excellent and stress-free transaction. Furnishing key rooms, having your electronics wired and installed, setting up your new utilities. All of these expenses are worth saving for.
2. IMPROVE CREDIT!
This can be a challenge for some and super simple for others. Managing a budget and observing cash flow allows you to depend less on credit and identify ways to improve your credit. Here are a couple of tips that I have used over the years that has really helped me:
Pay Down Debt - where there is credit, there should be low usage. Make sure that you are paying down/off your credit balances to ensure low debt-to-income ratios and higher credit scores.
Deal With Delinquencies - get rid of anyone who has anything bad to say about your ability to pay your bills. Pay them :). Establish payment arrangements, negotiate outstanding balances and make sure that they agree to wipe the slate clean (in writing). Save those letters to give to your lenders.
Don’t Open New Credit Lines - make sure you are vigilant about protecting your credit score by refusing to open any new credit lines. The more you protect this area of your credit, the less likely it Is for your score to drop because of inquiries.
3. GET PRE-QUALIFIED!
Now is the time to find out how much home you can afford. You must hire a mortgage lender who can assess that. Your mortgage lender should be someone who can give you an outcome and a strategy. Someone familiar with the pros and cons of various loan programs and home-buying assistance funds.
4. FIND YOUR NEW HOME!
Now you get to partner with a realtor and consider your options. Choose a realtor who has an understanding of your local real estate market & access to information to help your process run seamlessly. By providing the realtor with the pre-qualification letter provided by your lender (most realtors will request at the time they take you on as a client), they are able to find properties that fit within your parameters.
Did you know that during the month of January, a network of pretty cool realtors and myself (better known as The Belle Agency of Nexttier Realty) will be hosting FREE homebuyer brunches? There will be 3 taking place throughout the Washington DC and Baltimore regions. If you’re interested in attending, be sure to RSVP under the “Events” section of the homepage.
Finding your new home should be fun! It should exciting! You should feel supported throughout this journey. Hiring a real estate agent to help you accomplish your goals and dreams with your new home will help to make that happen. If you’re ready, send us an email and we can help you get started.