A question we face eventually is whether it's time to buy a home. Here, we talk about whether buying is cheaper than renting in Halifax.
That lull between the end of holiday parties and spending time with loved ones and New Year’s Eve is like a weird fog. We don’t know what day it is and don’t really know what we should be doing with ourselves. As we turn on the TV though, we see businesses gearing up for the New Year with semi-annual sales and news segments on what to expect for the new year and decade. Entering a new decade has raised many discussions on what to expect technology-wise, religiously, and environmentally for the near future. Discussions about buying a home and preparing for a big purchase in 2020 are one of those popular discussions we should be thinking about. Understanding how the actions we take now will shape our future aide in a seamless home buying process in the new year and decade.
Start with a Preapproved Mortgage
With our current housing market, it’s quite important to get a preapproved mortgage. Across the nation, prices hedging towards an upward trend, interest rates continuing to remain low, and we are seeing a low inventory of homes for sale. All of these factors combined make it vital to get a mortgage pre-approval. Having a lender and a preapproved mortgage gives you an advantage over buyers that don’t- especially in such an intense seller’s market. A mortgage pre-approval tells sellers that you are serious about your offer. Starting with a broker and getting a preapproval lets buyers know what they’ve been approved for and limits the number of hurdles that can delay the home buying process.
You Should Know How Much You Can Afford
Starting with a mortgage pre-approval allows you to then determine how much house you are able to afford. A homeowner can get a rough estimate of how much house they can afford by multiplying their household’s annual income by 3. For example, if a household makes $80,000 a year, its price point will be approximately $240,000. By going to a broker first and getting a mortgage pre-approval, homebuyers will have a more exact price point. This allows homebuyers to shop within their price range and not max out their income when buying a home. Being unaware of your max price point can put you at risk of financial trouble with no breathing room for emergencies and unplanned expenses.
Avoid Making Large Purchases
Taking on large amounts of debt while in the process of buying a home can put you in serious financial trouble. Large purchases, like a new car or extravagant family vacation, can put home buyers at risk of losing their mortgage pre-approval and be unable to afford their dream home. Lenders look at a borrower’s debt-to-income ratio, which is how much money a borrower makes in comparison to how much debt they have. The debt-to-income ratio influences how much money a lender is willing to let you borrow in order to finance a home. Keeping your debts low-even if you’ve already been preapproved-can make the home buying process run a lot smoother. Remember, being pre-approved does not mean that the mortgage amount is 100% guaranteed!
A new decade allows for many opportunities to take charge and navigate our future the way we want. How can the actions that we take now shape the next ten years? But more importantly, what actions can we take now to put us in a position to buy a home in 2020? Starting with a mortgage pre-approval gives homebuyers an advantage when buying a home and allows them to have an exact price range to shop at. Not only does it put them in a better position to buy a home in the new year but it allows them to take action and shape their future. When looking at making a big purchase in 2020, come to talk to our mortgage experts at Clinton Wilkins Mortgage Team. You can always get in touch with us here!