After two years of record-low, mortgage interest rates, today’s future homebuyers are moving into a rapidly increasing interest rate market. Home price appreciation remains high and inventory is still low. But where there is a challenge, there is opportunity, and educated and prepared future homeowners can position themselves to jump the hurdles in their way. Here are some tips to help you do so.
Get educated.
Seek out and take a homebuyer education class. Making informed decisions is key to successful homeownership. Many communities offer free homebuyer education courses and a list of HUD-approved housing counseling and education programs within your area can be found by following this link by the Consumer Financial Protection Bureau. Talk with lenders, realtors and attorneys (if applicable for your area) and begin to build your home buying team. It may be that you will want to talk with more than one lender or realtor to find the best match suited to your unique personality and needs.
Figure out your down payment.
One of the biggest barriers to homeownership is the lack of funds for a down payment and the added burden of closing costs. Saving for a down payment alone is challenging enough. Closing costs can amount to as much as 3% to 6% of the home price. This creates the potential that closing costs could amount to more than the minimum required down payment on an FHA loan. In addition, research locally available down payment assistance opportunities, as a good DPA program can make it possible to buy a home now before prices go any higher. For example, CBC Mortgage Agency provides Chenoa Fund down payment assistance. This program provides the minimum down payment assistance amount or 5%, meaning you could get assistance with your down payment and closing costs. Many states, cities, counties, and employers also offer assistance programs, some of which can even be combined (with careful planning). To learn more about Chenoa Fund down payment assistance, please reach out to info@chenoafund.org.
Shop around, pick a lender with the best fit, and get pre-approved.
It can be easier to have an offer accepted on a home with a pre-approval in hand. A pre-approval means a lender has looked at your financial background, including your credit report, and determined how much home you can afford. Because the lender has reviewed your complete financial picture during the pre-approval process, you will have a better idea of the estimated monthly costs and what interest rates you can expect on your loan. Knowing how much you can afford will assist you in narrowing your home buying search and setting realistic expectations. Since not all lenders offer down payment assistance programs, be sure to ask your lender up front if they work with assistance programs. You can also reach out to info@chenoafund.org to learn more about lenders in your area that offer Chenoa Fund down payment assistance.
Contact a real estate agent.
A great real estate agent is a homebuyer’s best friend and fierce advocate. An experienced, knowledgeable real estate agent will have expertise in the local market, utilities, zoning rules, home inspections and more. An agent will have greater access to listings soon to come on the market and can provide data on recent sales and can help you in negotiating a purchase agreement that meets your needs and allows you to have the opportunity you’ll need to perform due diligence before you are locked into the purchase. Most of all, a trusted real estate agent will be your rock helping you to make sound decisions on what will become your future home.
Be flexible.
And finally, stay light on your feet and ready to move at a moment’s notice. If a house viewing is available in an area that you’ve had your eyes on, make time to get down there before other borrowers. If a home gets snapped up before you can put down an offer on it, be prepared to comfort yourself quickly and then square your shoulders before pressing forward. This is your home as part of your future that you’re working toward, and unexpected obstacles will arise, but never let yourself get overwhelmed or give up.
To learn more about Chenoa Fund down payment assistance and how it can help you purchase the home of your dreams, please visit chenoafund.org.
CBC Mortgage Agency™ – NMLS 1186381
For licensing information, go to www.nmlsconsumeraccess.org.
Illinois Residential Mortgage License #MB.6761292. Illinois Department of Financial and Professional Regulation, Division of Banking, 100 West Randolph, 9th Floor, Chicago, IL 60601 – 1-888-473-4858. Georgia Residential Mortgage Licensee, License # 1186381
