Over the past few decades the housing market has gone through a boom and a bust, followed by an insane decade of home-price escalation, wide-scale under-financing, and subprime lending. Today, many homebuyers are stepping into the real estate arena for the first time and they are wondering where they fall in the home buying “market” cycle.
Many clients ask me what advise or “rules” I give buyers based on my experience of the ever-changing market. Here are some rules for homebuyers looking to make the transition to homeowner.
- Research and learn about the area the home is in that you are interested in buying. Talk to the neighbors. You’re not just buying a house, you’re buying a neighborhood.
- Put down 20% of the purchase price if possible to avoid mortgage insurance.
- Keep extensive financial records, and be patient throughout the entire process.
- Don’t overpay for a house you can’t really afford expecting the market to appreciate.
- Less home can actually mean more money in your pockets.
- Actively manage your credit and shoot for a score above 750.
- Plan to stay in your home as long as possible.
- Budget for all the costs of homeownership not just the monthly mortgage payment. Calculate funds for property taxes, insurance, upkeep, and even emergency home repair)
- Feel out your job and the security you have within your role with the company. Also look into your companies industry and make sure you don’t foresee any fluctuation in the market industry that could alter your employment.
- Connect with a trusted lender and work patiently and closely with them to ensure your financially side of the transaction is not only inline for the success of your offer, but also for the success of your family’s financial future.
I am always available to help interested homebuyers learn more about where they stand financially and how they can transition smoothly into home ownership.