Home ownership continues to be a strong element of the American Dream. If you feel that you are ready to become a first-time home buyer in the next few months, you should know that you are entering the market at a time when the real estate economy is enjoying a level of stability that has not been experienced in more than a decade. With this in mind, here are four things you should keep in mind as you start looking for a new home:
Figure out How Much House You Can Afford
Economists have been calculating consumer affordability over many decades, but the concept of figuring out the true cost of housing on an individual basis was not widely used until after the collapse of the American real estate bubble in 2008. You can search online for home affordability calculators to help you estimate how much money you can realistically spend on monthly housing payments according to household income, but it is a better idea to have a mortgage loan officer help you with this.
Getting a Mortgage Pre-Approval
A few metropolitan areas across the United States were considered to be sellers’ markets in 2017; this means that housing supply is short at a time of high demand, and thus prospective buyers may have to enter competing bids on properties. If this is your case, you may encounter situations when sellers will only entertain bids from buyers who have a mortgage pre-approval letter; the rationale is that buyers who have not obtained such documents may end up not qualifying for home financing, which would make getting to closing an uncertainty.
Working with a Real Estate Professional
As a first-time home buyer, the last thing you would want to do would be to try to go through the process without adequate representation. Real estate acquisition is a complex process that most people will find too intricate and confusing the first time around, particularly if they are looking at a foreclosure or “for Sale by Owner” listing. If you are already working with a mortgage loan officer, he or she may be able to give a good referral for a real estate agent like Coldwell Banker George Realty or someone similar.
Consider New Construction Opportunities
When market conditions are optimal, new construction homes tend to appreciate in value very rapidly. As long as you can be patient, purchasing a home that is under construction when you apply for financing could be a smart move from an equity point of view.
In the end, you should not be afraid to enter the housing market as long as you have adequate real estate and mortgage representation.
Do you have any tips to a first time homebuyers? Please, do share your comments below…
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