The first quarter of 2020 brought with it a lot of economic uncertainties. While it first seemed like real estate would take a strong hit, Fannie Mae’s index on home buyer and seller outlook registered second- and third-quarter increases. Overall, both groups are optimistic that the real estate market will weather the pandemic.
With low interest rates and lower home prices becoming more available, the current environment can present great opportunities for you. Follow this home buying guide to make your entry into homeownership a successful one.
- Assess your finances.
As a first-time homebuyer, you stand to make the biggest investment in your life so far. As with other big purchases, taking a step back to get a full look at your income and expenses is a must. Lenders want to see savings and stability. So, aim for having 20% of the down payment for a home ready and check if you’re following the “mortgage rule of thumb.” According to this rule, you should be devoting 28% (or less) of your gross monthly income to house-related expenses after budget calculations and lifestyle adjustments.
- File your mortgage application early.
While the pandemic continues to leave many questions open, what’s certain is that mortgage rates are breaking record lows. Buyers with stable incomes are especially poised to take advantage of these rates. There is a catch, though. Mortgage lenders are now more cautious and meticulous with new mortgage applications.
To get the financing you need in time, start your application early and gather all the documents that you might need in the inspection of your finances.
- Search for a home within your budget.
This ties in closely with assessing your finances and has an important role, since the pandemic can still develop in several ways. Though it’s tempting to go for your dream home right off the bat, still exercise caution and remain flexible. Look at prospective homes that you can afford.
We don’t recommend looking at homes that cost more than three times what you earn before taxes. This risky move might cause you to fall into debt.
- Act with your needs in mind.
Competition for homes can get intense. Avoid getting caught up in a bidding war for the wrong home by creating a list of non-negotiables. These are the things that you want to see in your first home. For the best outcome, make sure these match your lifestyle. For example, if you’re planning for a family in a few years, look for a spacious home in neighborhoods with good schools.
- Familiarize yourself with the home-buying process.
Buying any home starts with checking your credit and ends with signing the final closing papers. A lot happens in between, and most of it can overwhelm a first-time homebuyer. Read about the general process, and find out what happens when it’s time to close. If you’re unclear about something, ask your real estate agent. They can help you make your first home-buying experience as informed and as seamless as possible.
If you’re getting ready to buy a house during the pandemic, make sure you have experts at your side. Contact our team today at info(at)aerishouse(dotted)com or at 602.466.9771 so we can help you start on your journey toward getting the Central Arizona home you’ve been saving up for.