With home prices rising every month for the last five years, the median existing home sale price has climbed to $252,800 — an over 2% increase from last year alone. This may sound like good news to sellers, however, buyers are finding this new atmosphere increasingly challenging. Cities across the U.S. are facing major housing shortages, which means buyers have to compete for homes with bidding wars and offers well above asking price.
But there has been one advantage for home buyers: low mortgage rates. Recent mortgage rates have been hovering below 4%. These falling rates surely help to soften the blow of rising home prices.
If you’re thinking about taking the leap into home ownership, here are some strategies you should keep in mind.
1. Check your bank balance. Lenders usually like to see a 20% down payment before they’ll give you a loan, but it’s not a requirement. There are also low down payment loans available, including government-backed FHA loans that only require a 3.5% down payment.
2. Know your numbers. Lenders use a three-digit number called a credit score to decide whether to lend you money, so you need to know what your score is before you start house hunting. The higher your score, the more likely you are to get a loan and a lower interest rate.
3. Check in with your bank. House hunting is fun, but it helps to know how much home you can afford before you start looking. If you’re not sure, asking the bank what they’re willing to lend you is a good place to start.
4. Do your research. First start looking at online listings where you want to live to get an idea of what homes cost and figure out what you can expect to get within your budget. It helps to make a list of which features you definitely want the home to have, and which ones would be nice, but aren’t deal breakers.
5. Find a trusted adviser. Experts recommend asking friends and family members to recommend somebody they’ve worked with personally, and then interviewing them.
Your real estate agent is the best source of information about the local community and real estate topics. Give Kevin Cooper a call today at 603-657-6787 to learn more about local areas, discuss selling a house, or tour available homes for sale.