Do you want to buy a house? 5 obstacles and how to overcome them

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The process of buying a home can be both invigorating and intimidating. Buyers remain nervous as we continue to see low inventory as prices continue to rise up to 25% above the average sale price, but despite nerves buying a new home is also eliciting lots of enthusiasm, whether for an upgrade, move or a new job. If you’re not sure if you’re ready to go through the process of buying a home, here are some tips to help you. You could be closer to owning your dream home than you think!


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Take advantage of today’s interest rates to help fund your down payment

One of the biggest challenges home buyers face is having enough money for a down payment. However, buyers now have many options for mortgage loans. 2021 featured some of the lowest interest rates the country has seen. This year, with 30-year mortgage rates with an average of 2.9%, 1% less than a year ago, some institutions are offering as little as 0% off, so it’s important to capitalize today, according to The Mortgage Reports.

According to Councilor Forbes, economists expect interest rates to rise to 3.5% next year, from the current average rate of 2.9%. With current interest rates remaining low, buying a home now allows buyers to lock in to lower monthly payments without breaking the bank. This allows the buyer to have money available to use for other financial needs and purposes or for renovations and projects.

Stay competitive without cash

In today’s market, many homebuyers fear competing with other buyers making cash offers. Most of us don’t have a lot of money to buy a home, but there are other options you can take advantage of to keep sellers happy, one being a certified letter of approval. Known as the second best thing to a cash offer, it gives buyers a competitive edge over other buyers. Make sure you consider all of your home buying options this will help you close the deal!

Navigate Debt

Those of you with a high amount of debt may think you don’t qualify for a mortgage, but you don’t always have to. A key part of understanding what you’ll qualify for is learning what your Debt-to-Income Ratio (DTI) is. There are strategic ways to lower your DTI while looking to buy a home, but it varies from person to person.

The first step in any debt reduction game is to write down all of your monthly payments in order from largest to smallest. This list should include any extras you likely have set up for automatic payment, like streaming, music, and app subscriptions, and while lenders don’t use these payments to qualify you for loans, it does give you an overview of the destination of your monthly money. Creating this list allows you to see your financial life on one easy page. From there, you can start figuring out which payments are must-have and which you can do without. Sometimes increasing your cash flow is as easy as finding cheaper cell phone plans or insurance plans. In other situations, it means consolidating the monthly payments into one payment. One unique way to do this is to use cash refinance, but it is essential that you involve a professional lender as this would involve the homeowner getting emergency approval. It is not uncommon to have clients with a DTI over 50% today, who accept applications in which they will use the equity in their home to pay off their debts, which then positions their percentage of DTI at a low 40s or even less once the loan is closed – making it a more attractive borrower. But again, every situation is different, so having a reliable and qualified lender to help you identify these chess moves is essential.

The power of budgeting!

We understood. Budgeting is difficult! Fortunately, there are personal finance apps, websites with tips and budgeting experts available to you if you need to budget. Although budgeting is a daunting task, there are some simple tools that can help calculate interest rates and down payments. However, it is important to understand the budget home buying options available to you, one being a certified pre-approval letter. Today’s market makes it almost impossible to buy a home given all the cash offers, but a A certified pre-approval letter is the second best thing to a cash offer and is an economical way to gain a competitive advantage over other buyers.

Second, lenders like AmeriSave Mortgage Corporation have cost-effective tools like the Lock and Shop option that allows homebuyers to shop for their homes with the peace of mind of knowing not only what they can afford, but also the freedom to focus on finding their dream home without worrying about a fluctuating rate.

Ultimately, you want to find a lender you can trust – trust that they’ll tell you what’s best for your situation, rather than trying to get you the highest mortgage while in fact, it could really hurt you in the future.

Credit History – Don’t Let It Repeat

Since there are many factors that affect your mortgage rate, it’s important to understand what influences your future when it comes to homeownership – your credit score being one of them. If you have a bad credit history, there are programs available to help you on your homeownership journey. Be sure to check with your mortgage broker about the different programs available that will help you improve your credit.

Self-employment

Self-employed Americans have faced a lot of adversity throughout the pandemic. If you are now self-employed, you may have struggled to prove active income to qualify for a mortgage, but luckily providing documents such as your previous years’ income, tax returns, and balance sheets. , you will probably increase your chances. to be able to claim a loan. However, be sure to check with your lender for the proper documentation in order to set yourself up for success.

Despite low inventory, high prices, and personal financial hardships home buyers face in today’s market, there are ways to make your dream of owning a home come true. By paying close attention to today’s interest rates and down payment options, and considering your debt, budget and credit history, you could be even closer to owning a home. your next home!

Author: Founded in 2002, AmeriSave Mortgage Corporation is a leading mortgage lender known for pioneering the first truly digital mortgage experience for borrowers. With six major lending centers located across the United States, AmeriSave is a direct-to-consumer lender, licensed in 49 states and approved by DC, FNMA, FHLMC, and GNMA. For more information visit www.amerisave.com.


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