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The vice president of demographics and behavioral insights at the National Association of Realtors, Jessica Lautz, said, the market is expected to rise in 2022, Zillow is predicting a home value growth of 11%.
She said while the supply of ready homes is still low, and the mortgage rates are rising which has led to competition in the marketplace.
Here are a few tips that can be taken now to put yourself in the best position to find a new home while the rates are still historically low.
Pay off debt
A borrower’s debt-to-income ratio is seen by the lender when determining the loan. It is ideal to try and pay down the debt before you start house hunting. If you don’t have debts, then good savings can help with the down payment.
Check your credit
Another important factor that decides which mortgage and the type of loan one can qualify for is the good credit score.
Because the credit score influences the interest rate a borrower receives and potentially how much money they need for a down payment.
It is advisable to check your credit score beforehand so that you can work on it.
Getting a copy of your credit report to check for any errors or unpaid bills, is a good way to be updated and know where you stand in regards to your credit score.
Reach out to a mortgage lender
Ask them questions, understand the process and know what is needed in order to pre-approve a mortgage.
Use a mortgage calculator to find out how much you can afford and if it is better to buy or rent a home.
It will also show how much money you need at the time of closing, know your closing costs which are in addition to the down payment.
You can also be getting pre-approved before starting house hunting as it is needed before the submission of the home contract.
Look for low down-payment options
First-time homebuyers have options for low-down payments.
FHA loans have down payments as low as 3.5%. Borrowers can check out HUD.gov, which is the website of the U.S. Department of Housing and Urban Development, along with other local resources.
Jeff Tucker the senior economist at Zillow suggests taking quick action instead of waiting until the new year because the low rates will not come back again.
Reference Source: CNBC
