First Time Mortgage Hunters, Be Sure to Read This
Although spring and summer are considered the hottest home buying seasons, there’s something to be said about waiting until winter to get into the hunt. After all, in winter, those families who bought over the summer will be already settled into their new homes and many of those who didn’t buy will put their home buying dreams on hold until the spring thaw.
This means in winter, there’s far less competition and that can sometimes translate into sellers being more willing to negotiate.
Of course, while there are certainly advantages to be had by waiting until winter to get your mortgage, there are some things you should be doing to help improve your odds of getting the mortgage and interest rate you’re aiming for. Here are six tips for first time homebuyers getting a mortgage in winter 2023-24.
Take Control Over Your Credit
One of the biggest factors in you getting the home loan you want is your credit history and score. The good news is that you have total control over how good your credit can be. Ideally, you should start cleaning up your credit history long before you start your winter home search because it can take time for positive action to be reflected in your score but anything you can do to help your credit will be a plus.
Know What You Want
Before starting your home search, have an idea of what type of home you’re looking to buy. You don’t want to waste time seeing condos or townhomes in the city if you desire a single family home in the suburbs. Make a list of your plans for the property, so you can work on a narrower field, but one that is filled with more promising opportunities.
Save Money
Sure, some mortgages can be acquired with little or even no money down, but will they provide you with the best financial solution for your needs? After all, if you don’t put at least 20% down on your home, then you will be forced to pay for private mortgage insurance, thus increasing your monthly payment. And you probably won’t get the lowest interest rate either.
So, save as much money as you can because the amount you put down on your home instantly transforms into equity.
Create a Home Budget and Stick To It
Do a thorough analysis of your income and debt obligations, so you can create a home buying budget that will allow you to ensure that you don’t buy more home than you can comfortably afford. Remember, even if your lender tells you that you can get approved for a certain amount, that doesn’t always mean that you can afford it. Create your budget, so you know your limitations and then stick to it.
Get Pre-Approved for Your Home Loan
In winter, home sellers can be more open to negotiating with buyers, simply because the demand isn’t as high as it is in the summer. This is where getting pre-approved for a loan can be a tremendous advantage because your pre-approval tells the seller that you are already approved and ready to buy.
For many buyers, the guaranteed approval can be enough for them to accept an offer right away, even if the amount is lower than their asking price.
Don’t Forget to Factor in Closing Costs
Saving up for the down payment is one thing, but there are also closing costs to keep in mind when buying your first house. Closing costs include a collection of fees involved with the buying processes, including inspection fees, appraisal fees, title insurance expenses, homeowners insurance, property taxes, and more.
You can choose to roll the closing costs into your mortgage, but that will increase your payment and your interest rate, so if you want to enjoy the lowest payment possible, then put enough money aside to cover your closing costs. Your real estate agent or loan officer should be able to give you a ballpark number as to how much you’ll need.
Buy Your House Before the Market Gets Any Colder
It’s not news that like the weather, the housing market has cooled off, especially with interest rates recently having climbed back up over 7%. So, if you’re thinking about buying a home this winter, then you may want to start the ball rolling sooner than later.
There’s still time for you to get into a great home with a decent interest rate, so start following the above tips and put yourself in the best position possible to land your dream home with a mortgage that makes sense for you.
