5 Ways to Ensure You Are Able to Buy Your Dream Starter Home
The current real estate market in the United States is not the most welcoming for first-time homebuyers. As interest rates and home prices soar, it’s becoming harder for buyers to get a starter home when competing with others out there.
Right now, buyers are having to find spaces much farther than their initial location because of how competitive the market is. The market is only made up of 6% first-time homebuyers entering the market because of this worrying trend. So, if you’re looking to buy your dream starter home now, you need to make sure you can increase your chances and get past these hurdles to make sure you get your foot on the property ladder.
Maintain a Good Credit Score
The biggest thing you can do to get the home you want is to ensure you have a good credit score. Not only does this open you up to lower interest rates but it also gives you more options in terms of lenders and properties. Both sellers and lenders are more likely to approve your application if you have a good credit score.
During your homebuying process, you can expect hard and soft credit check to be conducted. This just gives lenders and sellers a clear picture of your financial habits and likely ability to pay a mortgage. What you need to consider is that hard checks put a ding on your score and it can stay for a few years. This makes it better to have a high starting point that won’t hurt your options after just a few checks.
Set Aside Your Downpayment
Don’t wait around to see how much you need to set aside. It’s much better for your budget if you set a ceiling and keep money saved for the downpayment.
When you’re looking for options, you have a better chance of getting the place if you’re ready to pay out the initial downpayment right away. After all, overall home sales are seeing a downturn that is, in part, due to homeowners being reluctant to sell. Your finances and location hunting will be smoother if you prioritize the downpayment.
Plan Your Finances Ahead
Other expenses don’t stop simply because a mortgage comes along. It’s important to consider not just your monthly and daily expenses but also any planned expenses and possible emergencies in the future.
Planning out your finances years into what you expect your mortgage plan to last will give you a better picture of whether or not you can sustainably pay for your dream house. This will also narrow down the options when you’re picking the best price and location.
Make Sure You Get All the Necessary Documentation
It can be a real headache when you don’t have all the documentation you need. This may even end up hurting your chances of getting the best offer, especially when you are up against other buyers that may be better prepared.
Think about the papers that you need to have in order. Pre-approval, bank statements, tax returns, proof of employment, credit reports, and offer letters - these are the essential pieces of documentation you should have put together by the time you’re speaking with property agents and sellers.
Consider the Market and Your Own Plans
It may seem strange to think about selling your home before you’ve even bought it, but this is an important consideration to make when choosing your starter home. What you need to think about is the local real estate market, where the trends are going, and how long you really plan to stay.
This just gives you a better idea of when the best window to buy is. It also lets you know if you can feasibly sell or rent out the place over time. The market price, buyer habits, and your own future plans will all come into play when you seek out the perfect home.
