Expert Tips for Homeowners – Take a tour of your potential new home

Table of Contents

1. Hike in home prices but not as fast as 2022
2. There will be a rise in mortgage rates
3. Smart steps to be taken by new homeowners[+]
   1. Keep a tab on your credit score and improve it
   2. Gather all your assets together
   3. Avoid spending too much on customizing your home
   4. Get multiple quotes from lenders
   5. Get hold of a reliable real estate agent

Are you one of those unlucky homeowners who got thrown away from the real estate market last year? If yes, you must be hoping for better luck this 2022.

The positive news in the current real estate market is that you possibly won’t witness staggering hikes in the prices of homes, that you saw last year.

Though the prices won’t rise as they did in 2021, prices are still anticipated to stay high and mortgage rates will also go through predicted hikes.

Over the past 15 years, the housing market in the US witnessed its strongest hold in 2021, with skyrocketing home prices. Prices jumped by around 20% during the third quarter of 2021 year-over-year, as per reports from the Federal Housing Finance Agency.

As Dodson Property Management explains, one reason behind these skyrocketing prices is that there are few homes in the real estate market.

Although there is a strong demand for houses, there are too many consumers who have reservations about buying their dream homes at present prices. However, this hike in prices has never barred people from hunting for houses.

Hike in home prices but not as fast as 2022

Prices of homes are expected to keep rising this year too but the pace will not be as eye-popping as it was in 2021. That hike in price was shocking and it wreaked havoc among potential homebuyers. As per the National Association of Realtors, the average price of a home was $3,48,900 in the year 2021, a figure that was up by 17.9% from 2020 – the highest to date.

It was then that a group of economists predicted a hike of 5.8% in 2022. But what exactly will happen in 2022 will depend on the way in which sellers and buyers react to the shifting market conditions.

There will be a rise in mortgage rates

Now that we are nearly through the first two months of 2022, the average rate for a 30-year fixed-rate mortgage has increased considerably. The rate has been the highest since the time of the pandemic in March 2020. This trend toward high mortgage rates is anticipated to continue despite prior predictions.

The eminent leaders of mortgage lending authorities are expecting interest rates to increase this year and this will also have a direct impact on the affordability of homebuyers and their capacity to buy a home.

No, that doesn’t mean that this hike will choke off the real estate market but the rising rates will certainly dampen the home-buying activity for some time. You ask mortgage brokers like MLD Mortgage and they’ll probably cite the same situation of the market.

Smart steps to be taken by new homeowners

It is certainly exciting to take the big leap from being a renter to a first-time homeowner. It is a wonderful feeling to get swept up in the excitement of being a homeowner. Here are a few of the practical and smart steps that you should take to save money, time, and effort.

1. Keep a tab on your credit score and improve it

Being a first-time homebuyer, the first step that you should take is to get ahold of your credit report and your credit scores. Watch out for any mistakes or delinquent accounts that have been sent off to the debt collection agencies.

In case there are these liabilities, they can act as obstacles whenever you apply for a loan. Once you spot an error, contact the creditor to sort out things as soon as possible.

2. Gather all your assets together

When the mortgage lenders assess your mortgage application, they’ll take a close look at the last two months’ bank statements apart from the other documents. In case you plan any deposit into your savings account from the assets, make sure it’s done within the 60-day window.

This helps in giving the funds enough time to season. By three-to-four months, you’d wish to deposit the required funds into your account so as to let them age properly.

3. Avoid spending too much on customizing your home

Chances are high that you’ve surrendered a huge chunk of your savings for paying down closing costs, down payment, and other moving expenses. When you’re a first-time homeowner, you are certainly going through a money crunch.

Their savings are not just used up but their expenses are usually higher, due to the new increased costs of homeownership.

Though you might want to customize your new home, upgrades can get costly. This is not the right time to jeopardize your savings as a new homeowner.

4. Get multiple quotes from lenders

Now that you’re almost on the verge of homeownership and things are gradually getting real, you should be sure about the monthly installment you want to bear. This is high time you shop around among several lenders before finalizing a specific mortgage loan.

It is vital to compare the rates offered by different lenders and other types of mortgages, to let you decide whether it is a perfect time to lock in the rate. Make sure you also take into account the experience you share with the lenders.

5. Get hold of a reliable real estate agent

After you’re done with your financing and you have a pre-approval letter with you, the next step should be to hire a real estate agent. But before you appoint one, make sure he is experienced in the area where you’re looking to buy.

He should give you worthy advice on the current real estate market conditions and should know whether or not the homes are priced properly. The agent should also be able to spot issues with your neighborhood or the home that you’re not aware of.

So, if you don’t want to risk getting your mortgage loan denied at the last moment, make sure you don’t make any large purchases like a car before the home loan is closed. Follow the tips mentioned above to finalize your homebuying dream.

Thank you for reading!