Before you start looking at homes, there are a few things you need to know.
There are many pieces to the home buying puzzle, so today we’ll be going over the biggest things you need to be aware of when you decide to jump into the market:
1. Get pre-approved. The biggest mistake people make is looking at homes before being pre-approved. Without a pre-approval, you don’t look serious about buying a home.
2. Focus on the mortgage payment rather than the amount. Look at what you’ll be paying monthly instead of how big of a loan you qualify for. Though you may be able to get a pricier home, you may not be comfortable with the monthly payments.
3. Be aware of interest rates. They’ll continue to rise this year, so the longer you wait, the more expensive your monthly payment will be. When interest rates go up, affordability goes down.
4. You don’t always need 20% down. There are programs that let you pay as little as 3% down, and the VA loan allows for zero down payment. The USDA loan can also allow for low down payments.
5. The minimum credit score for buying a home is 620. Some lenders will go for as low as 580, which is why it’s important to speak to one and see what you can do. Average credit is somewhere between 620 and 680.
6. Nationally, it takes about 42 days to buy a home. Depending on your lender, this number will fluctuate.
“When interest rates go up, affordability goes down.”
If you have any questions or would like further information, feel free to reach out to us. We look forward to hearing from you soon.