From storing funds for a down payment to never settling for just one rate, here are seven answers to the question, “What are the most important things everyone should know as a first-time home-buyer in the current economic climate in the US?”
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- Build Equity by Saving Up for Down Payment
- Look into Helpful Resources
- Remember to Research
- If Buying a Home Makes Sense for You, Buy It
- Be Aware of Hidden Costs
- Get a Solid Understanding of Your Credit Score
- Date Your Rate, Marry Your Home
Build Equity by Saving Up for Down Payment
It’s a good year to buy a home considering that mortgage rates in 2023 are expected to go down an average of 5.4%, according to the Mortgage Bankers Association. The decrease is attributed to the improving condition of our economy, increased GDP, and employment rates.
Saving up for a down payment should be one of your priorities prior to applying for a mortgage. Lack of immediate equity will be a significant concern if you decide to make a small down payment. Equity is important when you will be deciding to sell your house later on.
With a small down payment, you might have to stay in the house for at least 5 years in order to build up the equity that will allow you to sell. A larger down payment, on the other hand, equates to larger instant equity.
Stephen Keighery, CEO and Founder, Home Buyer Louisiana
Look into Helpful Resources
It’s really tough for first-time homebuyers in the current economic climate, but there is help available. Take the time to research what supports are offered. There are payment assistance programs sponsored by state and local governments, and FHA loans can reduce down payments to as little as 3.5%. Educating yourself about programs launched to help first-time buyers get on the property ladder is key to home ownership.
Catherine Mack, Owner, House Buyer Network
Remember to Research
Researching the local housing market and current trends is essential in understanding what type of home you can afford and the best time to buy. Knowing what kind of real estate investments are available, such as pre-foreclosures or short sales, can also be helpful.
Additionally, researching your credit score and financial situation will help you determine if you are ready to purchase a home.
Matt Teifke, CEO, Teifke Real Estate
If Buying a Home Makes Sense for You, Buy It
Buying a home is the single most important investment a person can make in their lifetime. The current economic times may not make home buying viable or favorable for everyone, but if the numbers work for you and it makes sense for you, buy the home. When interest rates go down, you can refinance. In the meantime your cost of living is fixed and you have an investment in which you can live.
Desiree Avila, REALTOR®, CRR Fort Lauderdale, DesiAvila.com
Be Aware of Hidden Costs
As a first-time homebuyer in the current economic climate in the US, it’s essential to understand that interest rates are historically low, making it an attractive time to buy a home. However, the housing market is highly competitive, with low inventory and high demand, which means you may need to act quickly and be prepared to pay over asking prices.
It’s also crucial to have your finances in order and get pre-approved for a mortgage before beginning your search. Additionally, be aware of hidden costs like closing fees, home inspections, and property taxes, which can add up quickly.
Estrella Gallegos, Realtor, eXp Realty
Get a Solid Understanding of Your Credit Score
One thing everyone should know is a solid understanding of their credit score and the mortgages available. This can help them determine the best type of mortgage loan for their current financial situation and help them get the most favorable terms. It is important to research the market trends in their area and be aware of any potential pitfalls that could affect their decision.
Troy Shaffer, Founder, Real Estate Expert, Blu Corporate Housing
Date Your Rate, Marry Your Home
First-time home buyers should not get so hung up on current higher interest rates, especially if they find the home they know they will be in for years to come. Rates are continuously rising and falling, so there is no reason to be hung up on higher rates.
Historical interest rates were significantly higher in the 80s and 90s than they are today, and will continue to fluctuate as the stock market continues to move up and down. That is just how interest rates have and continue to work.
Home buyers can always purchase a home at a higher interest rate (as long as the monthly payment makes sense), and as long as you continue to maintain and improve your credit score, debt-to-income ratio, and even annual salary, you can live in and enjoy your new home, and simply refinance into a lower interest rate when those rates come down out of the spike they are in.
Remember, date your rate, marry your home.
Wayne Clark, Owner, Foothills Exterior Cleaning Services