We are experiencing historically low interest rates due to the current COVID-19 pandemic. As institutional investors purchase US treasury bonds to keep their money safe, this decreases the 30 year mortgage rate. In the midst of a volatile stock market, US treasury bonds are an investment of choice. What does this mean for a homebuyer who needs financing? It means that you have lower monthly payments with the decline in mortgage rates. This will help a lot of buyers (especially first-time homebuyers) get into the market to purchase a home. It is an opportune time to buy with the low interest rates and flattening home prices.
Buying a home can be exciting, but it can be also stressful at the same time, especially for a first-time homebuyer. Before you even begin, do a little work, research and be patient, it can be a rewarding process. Here are some tips to get you started on your way and avoid costly mistakes.
Build up your credit
You need to make sure you can qualify for a mortgage. Get your credit report from major credit reporting agencies and check for any negative items. (To get more information about boosting credit scores, please click here) If you and your partner want to buy a home, share credit information and work together. Most lenders will place more weight on the better scoring partner.
Save for a down payment
There are mortgage programs that allow you to put down very little money; there are even 0% down mortgages available. While these programs can make homeownership a more achievable goal, putting a low down payment can be costly, leading to more expensive monthly payments. A typical down payment is 20%, but it can be less. Set aside a down payment that makes sense for you. With more money down, you’ll have smaller monthly payments and build equity faster.
Pre-qualify for a mortgage
Pre-qualification is a very important step to get an idea of what kind of home you can afford. It also helps your Realtor to show you the right properties with your budget. Check with a local bank or credit union and learn about various loan options.
Set a budget
It can be tempting to start shopping for your first home on Zillow or Trulia right away. But if you don’t have a budget in place, you could end up looking at houses way out of your price range. Start with a housing price you can afford and you won’t be disappointed.
Find a good real estate agent
Get an experienced Realtor who will assist you in your home search. An agent can also give you a background of the neighborhood and help you to make a competitive offer. Work with a knowledgeable Realtor who can patiently guide you through the first-time home buying process.
Inspect the house
A home may be the biggest purchase you will ever make, so why not make sure there are no issues? A home inspection reveals deficiencies of the home which may not be apparent to the untrained eye. The home inspector will inspect every part of the home from the attic, crawlspace, electrical, plumbing, appliances and foundation. This report will help you make a decision to either continue with the purchase or walk away.
At closing, title to the property is transferred from the seller to buyer. Congratulations! But our job as an agent with ChaneyBrooks Choice Advisors doesn’t stop there. We are always available to assist you with recommendations of service partners who can help with improvements and maintenance of your home.
A home purchase is an important step in life and we want to help you get there. By following our tips, and calling us to guide you through the process, you will have a peace of mind when purchasing your new home.