Buying a new home involves lots of emotions and excitement.
Written by Northwest Mortgage
Published on Thu, Mar 25, 2021, Last Updated on Thu, Mar 25, 2021
However, people should also exercise extreme diligence when making this lifetime investment. If you’re considering buying a new house this year, there are four important things to consider first.
1. Is It the Right Time?
The first step involves knowing if the time you plan on buying a new home is the right one. On the one hand, mortgage rates fell to a record low last year. They are expected to remain low this year as well. It creates a good opportunity for buyers to score an affordable mortgage. However, on the other hand, home prices are only getting higher and higher. One real estate data firm estimates that home prices can increase by 4.1% by October this year.
A good approach for new buyers is to secure a mortgage at a low rate and act fast to pick a home before it gets priced out. Waiting for home price to hit a possible plateau won’t just waste time but might also result in a hike in mortgage rates.
In short, now is a good time to buy a new home.
2. How is Your Credit History?
It’s a good idea to check your credit report and score to see where you stand. The numbers can help paint a picture in terms of what rates you will likely have on a home loan and if it’s feasible to proceed with the purchase of a new home with the credit score you have. If you’re at all worried about this process or think you aren’t eligible, just give Northwest Mortgage a call. We’ll be happy to help answer any questions you have and let you know what your options are, even if your credit score is low.
3. What Will Be the Down Payment?
A down payment is one thing that will require you to have a good amount of money upfront, but even if you don’t have a whole lot of cash available, that doesn’t necessarily mean it is game over. You can learn more about down payments here. Usually, you will have to pay 20% of the home price in a down payment, that is, if you want to avoid Private Mortgage Insurance (PMI). Some lenders might offer you non-PMI mortgages with a lower down payment. However, they are mostly available at higher rates. If you don’t have enough money saved, you may want to consider FHA loans. We want you to get into the home you want, so if you have any questions about this process or others, feel free to contact us.
4. A Pre-Approved Mortgage Deal Is Better than a Regular Mortgage Deal
We recommend shopping around for mortgage deals at more than one lender. This will help you find the best possible mortgage option available. Also, try to lock your deal with a company that can offer easy pre-approval. Having a pre-approval gives you a better insight and control of what you can afford. You can learn more about pre-approval here, or start the process with us here.