The weather’s getting warmer (maybe not as fast as we want but it’s coming), which means the real estate market is gearing up. If you’re one of the many buyers looking to purchase a home this spring, now is the time to start getting ready. Don’t wait until you’re standing in your dream home to take the necessary steps to make an offer. Follow our guide to ensure your finances are in order when you find the home you want this spring.
Ways to Secure the Best Mortgage Rate
Getting a good mortgage rate is one of the top priorities for home buyers. While the current rates are still relatively low, they’re predicted to continue rising throughout the year. To get the best rate possible, you’ll have to act fast and ensure that your finances are in tip top shape when it comes time to make your offer.
Check Your Credit Score
Those with higher credit scores tend to get the best deals on mortgage rates, so pay attention to where your number lies. Credit scores are three-digit numbers that reflect the information on your credit report. The higher it is, the better your score. As a rule of thumb, aim for a score above 740 to get the best lending.
House shopping is fun, but if you’re serious about buying you should get pre-approved before stepping into an open house. We’ll talk more about that process in a bit, but it’s important to note getting pre-approved for the loan should be your first step in the home buying process.
It helps you figure out your budget so that you can shop within your price range. And when you’re ready to make an offer, you won’t have to wait on approval from your lender – saving you precious time if you’re in a competitive seller’s market.
Notify Your Insurance Company
Before you’re ready to close on a home, you need to speak with your insurance agency and let them know you’re buying a house. They’ll have to set up your first year’s home insurance policy before the sale is final. That’s how you can determine the exact amount of your monthly payment and ensure you’re getting a mortgage rate that fits your budget.
Steps to Getting a Mortgage Pre-Approval
The most important step of the home buying process is getting pre-approval from Union Home Mortgage. Without pre-approval, you could wind up missing out on the home of your dreams. Fortunately, when properly prepared, getting pre-approval is a painless process that can streamline your home purchase.
Get Started Right Away
If you’re looking to be a spring buyer, then now’s the time to start preparing for your loan pre-approval. Even through spring is several weeks away, the sooner you get started the better chances you have of receiving approval for your loan. Set up a meeting with our team to start discussing loan options that best suits you.
Speak with Your Lender
Speaking with our team will help you figure out a loan amount that fits your budget. You may get approved for a higher amount than you anticipated, but that doesn’t mean you should take it.
Instead, focus on what you’d like to realistically spend on your mortgage payments each month and ask if there are any discounts or programs available that you can help lower your rate. Programs are available for first time home buyers, military families and low-income households that can make your purchase even more affordable.
Organize Your Financial Paperwork
Paperwork is like the lifeblood of the lending process. You’re going to have to provide several documents that outline your financial situation. In the weeks leading up to your pre-approval, gather as much as you can, including pay stubs, W2’s, tax returns from the last two years, asset statements and job history documents. If you’re self-employed, you may have to provide additional documentation.
Keep everything organized and updated for the pre-approval process. If you miss a piece of paperwork, it could prolong the process and may even cost you the ability to put in an offer on a home you have your eye on.
Tips for Home Buying in The Spring
Once your pre-approval is secure, it’s time to focus on the fun part – shopping for a new home! However, that doesn’t mean it isn’t going to be stressful. A competitive market means you need to be prepared to make an offer when you find the house you want. Here are some tips to prepare yourself for the buying process once you have your finances in order.
Know What You Want
Purchasing a home is a big decision, but you shouldn’t spend too much time deliberating between choices. Sellers want to get their home sold as quickly as possible and tend to favor decisive buyers over those that need to contemplate an offer. Be prepared with a firm offer when you find a house you like to increase your chances of getting the home.
Keep an Open Mind
Be realistic during the home buying process. If you’re in a competitive market, you’ll probably be up against several other offers on a coveted home.
Keep in mind it’s possible to lose a home you like to another offer. It’s frustrating, but staying emotionally detached from home will prevent you from getting upset.
Give a Strong Offer (With Some Room to Bid)
It may be tempting to offer a lower price for home in hopes of getting the best deal possible. But in a seller’s market, low-balling could cost you the home that you want. While it’s important to leave yourself some wiggle room in case of a bidding war, you still want to provide a strong offer to sway the seller in your favor.
Getting your finances in order to purchase a home can be a stressful process but with proper planning and guidance you’ll be ready to make your offer this spring. For more information on the pre-approval process and organizing your finances, contact Union Home Mortgage today!