Are higher rates ever good news for first-time home buyers? Here are some ways interest rate hikes might benefit buyers in the market.
Purchasing a new home can bring on a ton of anxiety. Every home owner has been there! We understand how intense the stress of buying can be, and it had us wondering what steps we could help clients take to ensure they have a smooth buying experience. If you’re struggling with the stress of purchasing, fear not! Here, we have collected five important tips to help you get through the process more easily.
#1 Get pre-approved
This might be our most common bit of advice, and that’s because it’s just that important! Pre-approvals put you in good standing with all the important people involved in your home purchase, like your lender and the seller of the home you’d like to buy. Being pre-approved means a lender has reviewed your financial situation, including your income, expenses, debts, and credit, to determine your overall creditworthiness. They will give you an estimate of the mortgage amount you may qualify for based on your circumstances. If you maintain your current situation, this means you have a good chance of getting that final mortgage approval when the time comes.
While a pre-approval isn’t an approval or a guarantee of financing, it puts you on track because it shows you what your standing looks like. You can make any necessary changes, and a lender will already have your information so the approval process will be faster. Finally, sellers like to see buyers with a pre-approval, because it shows you’re a committed buyer who is serious about sealing the deal.
#2 Be open-minded
Next, we recommend keeping your housing options open. It can be hard to balance open mindedness with specific housing needs you require, which can exacerbate the stress of buying. However, we recommend keeping an open mind when it comes to your housing wants, not needs. If you need a three bedroom detached house for your growing family, or you must be near public transit because you don’t have a car, those aren’t things you should budge on in your housing search. On the other hand, maybe things like yard size, number of neighbours, and proximity to amenities are factors you can be more flexible with. This will narrow down your housing search to properties that meet your needs, but not necessarily all your wants. You might find results that match your budget better with this strategy, and sticking to a budget is more important than having a home with an inground pool, for example.
If you’re buying your first home, open mindedness is especially important. Odds are you won’t be living in your first house forever. This property purchase is primarily a way to get into the market and build equity. When you decide to upsize to a new home, you will have an asset that gives you more leverage in the housing market.
#3 Be firm with your budget
The importance of a strict budget can’t be overstated. Buying a home is a big expense, and you don’t want to stretch yourself too thin trying to pay it off. Otherwise, you won’t get to enjoy any parts of homeownership at all. Your budget will depend on your income and expenses, as well as your credit. Make sure you budget for your down payment, mortgage payments, closing costs, moving fees, and future taxes and bills.
Once you have that budget in place, do not waver from it. It can be tempting, when we see a beautiful house that’s out of our price range, to go for it anyway and figure out the logistics later. In reality, this will lead to much anxiety down the line if you start struggling to keep up with payments. Maintain your budget and don’t budge. Don’t get into bidding wars or even view homes that are out of your price range. While budgeting isn’t fun, it does limit the stress of buying a home.
#4 Get a home inspection
If you use Airbnb, you’re probably happy that there’s regulations in place to ensure property owners renting out their spaces are providing a clean and safe area. We all care about staying in secure places when we travel, so why wouldn’t we give the same thought to a home we want to permanently own? A home inspection will examine your potential property and let you know if it poses any safety concerns. These might include anything like mold, fire risks, leaks, foundation issues, roofing problems, and more.
If the results of the inspection state the new property has a termite infestation, for example, the buyer should know this before taking possession. Once closing day comes, any issues with the home are the buyer’s responsibility. However, identifying these problems beforehand can lead to repair negotiations with the seller. A home inspection can save you lots of money and stress, so you’re not footing the bill for housing problems you didn’t know existed.
#5 Use a mortgage broker
Finally, our last tip to reduce the stress of buying is to take advantage of a mortgage broker. Brokers are dedicated to making the buying process easier for people like you. We meet with you to discuss your budget and pre-approval, we connect you with lenders who can finance your mortgage, and we help you close the deal when you purchase. Some of the trickiest aspects of buying, like finding the right lender and knowing your purchasing power, are made so much easier with a broker’s guidance. The whole process can be quicker, simpler, and less stressful. Brokers are committed to each client and work with their best interests in mind.
The stress of buying a new home can be overwhelming, but that’s why you have mortgage professionals here to help. With our guidance, you will have a whole team of individuals on your side, ready to help you purchase your property.
If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.