With mortgage rates at an all-time low, buying a home seems to be all the rage right now. Many people are leaving urban areas for cheaper homes with more space in the suburbs.
However, buying a house is much like a complicated sport—you should know the rules and be in shape before hitting the field. And once you are on the field, you should know how to maneuver through the challenges to succeed.
A good understanding of the housing market will get the most for your money and ease the process, especially in the pandemic. After all, you don’t want to end up unprepared or in a rush. If you are a veteran or military spouse, 2021 may also be an excellent time to utilize a Veteran Affairs (VA) loan for your home purchase.
- Know the Market
Long before you start house hunting, you should be keenly monitoring the market condition in the area you plan to buy a house in. Ensure you pay special attention to homes that fit your budget and specifications and track the duration these homes stay on the market. Also, check if there are any significant shifts in asking prices.
The housing market is hot, and there are not many houses for sale. The ones that are on the market also get sold quickly. The housing prices and interest rates also keep increasing, especially in suburban areas. By doing your research early, you will be able to better track changes in the market.
Leverage online research tools to get the most accurate info. Contrarily, consider partnering with a local realtor who will help you understand critical data points.
- Understand Your VA Loan
As a veteran planning to buy a home, you should know what your VA loan will cover. A VA loan is a $0-down mortgage typically offered by private lenders and partially backed by the Department of Veteran Affairs. Eligible borrowers can use the VA loan to purchase a property as their primary residence or refinance an existing mortgage.
Some sellers are hesitant to accept government-backed loans. When house hunting, find sellers who have worked with VA loans before. You can also ask your lender/realtor to point you in the right direction. Furthermore, consult with your lender or an expert to ensure you conduct a proper search for your new home.
Although VA loans require very little to no down payment and lower credit scores than traditional loans, having sound finances will still increase your chance of procuring your dream home.
- Know Your Budget
Whether using a VA loan or a traditional home loan, figure out your financing options ahead of the house hunt. Also, set parameters for your search regarding the budget.
Use a VA home loan calculator and calculate your debt-to-income ratio—a comparison of your current debts to what you take home after taxes. This will give you an idea of how much money you can afford to spend on a mortgage each month. Also, remember to account for property taxes and homeowner’s insurance.
Furthermore, avoid a bidding war as this often takes people out of their budget and into financial struggles. While you might qualify for more mortgage than you can afford, ensure you stick to your budget.
- Be Competitive
Your finances are in order, and you have found your ideal neighborhood; the next task is to find the perfect property and make a competitive offer.
As a rule of thumb, start strong, especially in a seller’s market. To do this, assess the property’s market value and look into what homes are selling for in that neighborhood. Make a reasonable offer, and be ready with a counteroffer if your first isn’t accepted, as negotiations happen quickly.
Also, know your limit when making a competitive offer. If a price is too high, it’s not a good idea to be too risky. The economy is still relatively uncertain, and you always want to protect your savings. If it is not the right time, save and prepare for when the circumstances are right. Remember that the housing market can change very quickly.
- Stay Safe
Many people are still taking precautions like wearing masks and gloves and social distancing, including when viewing a property. Much of what people have learned over the past year about protecting their health, and that of others, will likely continue to affect their behavior.
While touring homes in-person is safer now than it was at the beginning of the pandemic, sight-unseen purchases have become increasingly popular, causing things to move even quicker. It will help you save a lot of time while maintaining social distancing measures. Be prepared to do a lot of the touring virtually. You may also have to do a remote closing.
Believe in Yourself
Alongside the five tips listed above, there are plenty of other decisions you will have to make along the way. As long as you have the right lender and agent by your side, you can tackle them all in time. If you are unsure how to go about buying your first home, never hesitate to seek assistance. There are numerous sources online that can make your home-buying process more manageable.
Additional resources and useful info:
– If you’re thinking about buying or selling property, visit TexasLand
– Here’s why people are moving to southern states
– Adding a deck to your home – here’s what you need to know