Is this summer a good time to buy your first home?

Do you want to buy your first home in the near future? If so, you might be interested in jumping into the housing market this summer. Before you start viewing properties and putting in offers, however, you need to determine whether this is the right time for you to buy. It’s important to ensure you are entering the market when it makes sense for you to do so. With that in mind, you should know what to expect in a summer market, and how you can start preparing yourself!

What to expect in a summer housing market

While every location is different, and trends change year over year, the summer housing market has some defining characteristics that often hold true. It is typical for the summer market to be faster-paced than the winter in terms of buying and selling, for example. People tend to have more interest in purchasing a home during this time of year. This means you might have increased competition if other people are interested in the same properties as you. However, sellers tend to be more active during this time of year as well, which helps balance the scales. You will generally find more homes on the market right now than you would in January or February. This means potential buyers have more options to explore, including yourself!

Get your budget in place

Before you buy your first home, you need to determine your budget. This is a critical part of homeownership. Your budget, of course, determines what you can afford in a home. It will guide you as you search for the right property, make your offer, and submit your mortgage application. Without a proper budget, you have no way of knowing what you can truly afford. 

So, how do you determine your budget? You will want to work with your real estate agent and mortgage broker to ensure you calculate an accurate budget for yourself. They will examine your income and expenses, plus any debts you may have. This information reveals how much money you can comfortably spend on a mortgage. It’s important to use professionals for this process, as they have the best idea of how much homes and mortgages cost, and the mortgage rates you may be working with.

Confirm your down payment size

Your down payment is the biggest upfront cost associated with buying a home. The size of your down payment will depend on both the amount of money you have saved up, and the price of your new house. 

Let’s say you have $125,000 saved for a down payment. If you wanted to buy a $625,000 home, this would be a 20 per cent deposit. If your home was $750,000, however, your down payment would drop to about 17 per cent. It’s up to you how large you want your down payment to be, but there are some rules. Homes up to $500,000 only require a five per cent down payment. Homes between $500,000 and $1 million require five per cent on the first $500,000 and 10 per cent on the rest. Homes over $1 require a full 20 per cent. Keep in mind that any down payment under 20 per cent also requires the purchase of mortgage default insurance. 

A smaller down payment can allow you to enter the housing market sooner, putting you in a good spot to buy this summer. However, a larger down payment means your mortgage itself will be smaller. It’s up to you to decide how you want to navigate this process as a first-time buyer this summer.

Reach out to a mortgage broker to start the process!

Your first course of action when buying a home this summer should be to reach out to a mortgage broker! As a first-time buyer, we can provide essential guidance for you to ensure your journey into homeownership goes smoothly. We can work with you to determine the best budget and mortgage product for your needs, and get you in touch with the right lenders. If you try to navigate this process alone, you are more likely to add onto the stress of homeownership, and will likely end up spending more as well. We are here to make sure you get the best mortgage for your situation, and that you have confidence as you transition to becoming a home owner!

Buying your first home is an exciting milestone. Depending on your situation, you may feel like this summer is the right time to dive into the market. If you are preparing to become a home owner, now is the time to reach out to your local mortgage broker! We work with buyers of all types to find the perfect product and lender for your needs. It’s time to come see what we can do for you!

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can contact us at (902) 482-2770 or contact us here.