It’s no secret the current housing market and volatile interest rates are causing concern amongst buyers and sellers alike. However, don’t get caught up in the doom and gloom of popular news, channels. The 2008 housing market crash is not making a comeback.
In fact, buyer competition appears to be cooling its heels, making now a perfect opportunity for buyers to enter the market. We’ve got three great tips for you below.
Tip 1: Be Flexible
Expand your search area and tweak your home criteria.
Sure, you had your heart set on a certain neighborhood, but no one is selling! When pickins’ are slim, we can’t be picky. If you go just a little further outside your dream locale, oftentimes we can find an area that’s more affordable, where you get more house for the money. Also, buy the bones, not the bonuses. Maybe you had your heart set on a home with a pool, but those are too expensive, or not fitting your needs. Find the house that works, and if there’s space on the property, make plans to install your own! Alternatively, buy knowing that the average homeowner moves every 10 years. Your property will likely be a stepping stone, so buy something solid with the intention of trading up. If you can buy in an up-and-coming area, that time you live in the home builds equity. Then, in a couple years, you’ll be better positioned to afford that house of your dreams.
Tip 2: Research Alternative Financing Options
Rising mortgage rates are definitely a hot topic right now, being double what they were 24 months ago. They aren’t the be all, end all. Working with a trusted lender will yield the best results here.
Mortgage experts will point you to the best loan strategies for your situation. Strategy being the key word. An experienced loan officer will take the time to evaluate your entire financial picture (all your debt, assets, income and credit) in conjunction with the variety of loan options, to find the best mortgage for you. Their goal is not only to help you procure the home, but to be in a sound financial position for the life of your loan.
Tip 3: Down Payment Assistance, Gift Funds & Grants
There are quite a few different options when it comes to securing the funding you need to purchase a home – and specific options which may be available in your local community could be a game changer when it comes time to taking the first steps to becoming a homeowner.
NH Housing and Maine State Housing are two such local programs that offer down payment assistance to home buyers, but beware! While these are an excellent source of short term support, they do have their “catches” such as slightly higher interest rates or debt repayment terms. This is where your mortgage strategist comes in handy!
There are also tax-free options for coming up with home buying money, though they have to be executed properly. An individual may receive a $15,000 gift, tax-free, but be sure to double check you’re following the IRS rules on this to avoid taxation. Early withdrawal from a retirement account for a qualified reason (home-buying is one of them), is another option. Again – there’s a proper and improper way of doing this, so be sure you talk to your Financial Advisor before you even think about touching that money! Once the genie is out of the bottle… you know the rest.
Lastly, there are special loan programs for certain professions, typically those that are public servants; teachers, veterans, doctors, nurses and more. Your Realtor and their trusted Lender will know the ins and outs of these programs, so make sure you’re working with a qualified team. Their knowledge is your power.
With their fingers on the pulse of the local market, and having their collective expertise behind you, understanding your options now will help you set a solid foundation before you jump into house hunting.