The residential real estate market has been on a wild ride the past few years.
Mortgage rates hit record lows and then — in recent months — started to climb again. Home prices in many areas hit record highs this spring. In several areas of the country, it’s been common to hear about bidding wars for hot houses.
If you’re thinking about buying a house, your first thought may be to go to real estate websites and see what homes are for sale! But before you launch your mobile phone’s browser, you need to do just a few things to make sure you’re ready to make a competitive offer.
Understand the process first!
Buying a home is a lot more complicated than you may think. That’s why it’s critical to make sure you understand the home-buying process, the order of operations and some of the technicalities about mortgages and things like closing costs. If you're a first-time home buyer, this is a really important step. If you’re a veteran home buyer, things may have changed a bit since your last purchase, so a refresher is a good idea!
Understanding the process includes knowing how much of a down payment you need, what grant and first-time buyer programs may be available to you and more. A great place to start is with your credit union! Our Member Advantage Mortgage representatives can talk to you about the process and let you in on a few secrets that may help you.
Is your credit score high enough?
With most mortgage lenders, you’ll need a fairly decent credit score to qualify for a home loan. That means that before you apply for a mortgage, you’ll want to request your free credit report, correct any errors and make sure you’re in good financial standing.
In addition, you should try to avoid making any major purchases — like buying a new car. If you have questions about your credit score or how to raise it, you can always talk to your credit union! CommonWealth One’s certified financial counselors can talk to you about your credit score and the best ways to raise it quickly! They can also talk to you about debt reduction, ways to save for emergencies and even the benefits of a life insurance policy.
Find the best mortgage for you.
The 30-year, fixed-rate mortgage may be the most common, but you have a lot more options these days. From adjustable rates to shorter terms, not all mortgages are created equal. And, you’ll want to look beyond the interest rate to see if you’re getting the best deal for the home you want to buy.
For your mortgage, we recommend that your first stop is the institution that has the best chance of giving you the best rates from the start — your credit union. Be sure to talk to our Member Advantage Mortgage representatives about how to get the best mortgage rates! Click here to request a free consultation to discuss your options with an expert!
Don’t be “house poor”.
It’s tempting to buy the biggest, nicest house you can possibly afford. But then you may be “house poor” — your mortgage is so high that you don’t feel like you can go out to dinner or it becomes difficult to cover those unexpected repairs. Make sure that when you’re budgeting for a home, you’re considering all the expenses — from mowing the lawn to paying the electric bill, taxes, insurance and saving a little every month for emergency repairs.
If you can find a cheaper home and put some work into it to make it your own, you may be happier in the long-run. Remember this rule: Buy the house you need, not the biggest house you can afford.
We’re following the local real estate market closely, just like you are! Let’s work together to make the home-buying process seamless, easy and fun!
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