Warm weather, school schedules, and a sunny sense of optimism are just a few factors that send homebuyers out in summer. Here are a few tips for navigating this busy season.
1) Pre-Approval is Key. While experts are predicting a slightly cooler summer home-buying season, you’re still likely to face considerable competition in a seller’s market; housing inventory is low and demand is high. One of the best ways to have an edge over other potential buyers is to go out there armed with a mortgage pre-approval letter – you’ll submit the letter with an offer on a home, showing the seller you’re serious and qualified.
2) Strive for a Solid Down Payment. While VA loans may require no down payments, and FHA loans require low down payments, putting down a considerable amount – 20% is optimal – has advantages. You’ll have immediate home equity, a lower monthly mortgage payment, save on interest over the loan’s life, and may get a better mortgage interest rate.
3) Calculate the True Cost. If you’re a first-time homebuyer, you might not know the true cost of owning a home. To calculate the real cost, you’ll need to consider things beyond the down payment and monthly mortgage payments. These include closing costs, property taxes, homeowner’s insurance, possibly fees for a homeowners’ association, home maintenance, and more.
4) Make a Features Checklist. A tried-and-true tactic for house hunters is to make a Wants Versus Needs list. This should help you immensely as you’re pouring over listings this summer. The must-have items in the Needs column could include the number of bedrooms, a garage, home office space, and proximity to good schools. It’s great if you find a home with a jacuzzi, high ceilings, or a cozy breakfast nook, but they probably belong in the Wants column.
5) Drill Down on Your Finances. Your lender will do a thorough examination of your financial situation, so you should, too. Calculate your debt-to-income (DTI) ratio as lenders often require that to be 43% or less. Get your credit cards in order – best if you’re not using over 30% of your available credit. And find out what your credit score is.
6) Check Out the Latest Apps. Mobile apps are increasing in numbers and sophistication and becoming indispensable tools – the National Association of Realtors estimates that 67% of homebuyers use mobile devices in their home searches. Some top apps include Zillow, Realtor.com, Redfin, and Trulia.
For summer, fall, and beyond, First United is here with a diverse range of Texas mortgage programs to fit your financing needs. Give us a call today at (972) 591-3097.
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