If you have been thinking about buying a home this spring, you’re not alone. Experts predict there is quite a bit of pent-up demand following the recent sellers’ market and higher interest rates. Many homebuyers have been waiting patiently for a cooler market with lower interest rates…the key word here is MANY. It’s not anticipated that we will see a flood of new listings as homeowners who currently have extremely low mortgage interest rates seem to be less likely to want to sell and lose the rate. As people start to list their homes in the new year, and more buyers get off the fence, we could see housing prices push higher or at the very least, stay the same as the demand for homes is still strong.
Regardless of if the market is favoring buyers or sellers, if you’re a homebuyer, you cannot start the preapproval process too early. Even if you’re a year out, it makes sense to meet with a licensed mortgage professional and create a plan for buying your next home. It doesn’t matter if you’re a first-time home buyer or if this is your third home – it’s good to be prepared.
Here’s what I recommend to prepare for the 2023 Spring Homebuying Season:
Meet with a Licensed Mortgage Professional to review your financial goals and start the preapproval process. It’s important to review your credit and see where any improvements can be made (this impacts your loan approval and interest rate on your new mortgage). It’s also important to make sure you’re making the right financial moves – for example, should you pay down debt or save for a down payment? Can you make a job change without impacting how much you qualify for? The right answer depends on what your financial scenario currently looks like, what your goals are and what mortgage programs are available that are best suited for you. It’s not one size fits all.
Buy your home with cash. A cash buyer has a distinct advantage over those who are making an offer that depends on a mortgage approval. We have a program that effectively allows you to buy your home for cash. Once the cash buyer program purchases your home, you then buy your home from the cash buyer program. By the way, cash offers can typically offer under list price and can close in a shorter time than one with financing.
Don’t wait for mortgage rates to go down if you find your dream home. The waiting game can cost you with rising home prices or missing out on your home and the risk of rising mortgage rates. In this current market, I have been working with clients who have been successful with having the seller pay for temporary buydowns, which lowers the interest rate for a specific amount of time. For example, a 3-2-1 Seller Buydown lowers the interest rate by 3 percentage points for the first year, then 2 percentage points the second year, 1 percentage point the third year and then the mortgage payment for the fourth year and remaining term is at the actual note rate for the mortgage. This provides the buyer with 3 years of a reduced rate period to refinance should mortgage rates trend lower. Fannie Mae’s latest prediction has mortgage rates in the mid-5’s by 2024.
Consider buying a fixer-upper or new construction. Your home might be a diamond in the rough that just needs some TLC. We have several programs available that can help you build the home you’ve been dreaming of. And you don’t need a major down payment or perfect credit to qualify for these programs! Create your perfect kitchen, add that ADU or extra bedroom – this is a chance to create a home that you want!
Questions? Please reach out to me! I’ve been helping people buy or refinance their homes for over twenty years. I’m happy to help you too! 🙂
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