If your new year’s resolution is to buy a home in 2017, then you’ve got your financial work cut out for you. It goes without saying that a brand-new real estate investment will be one of the biggest commitments in your investment portfolio. And of all your investments, it will certainly require the most effort to maintain. Nonetheless, the return on investment from quality real estate can make all the trouble of aggressive saving, negotiating, and endless inspections worthwhile.
For anyone who will be spending the first few months of 2017 shopping for a new home, here are six things you need to know before you start.
1. Mortgage rates have risen.
The overall housing market remains strong. New applications on purchases have risen, which seems to indicate the prospects of higher interest rates and prices is creating a sense of urgency among buyers.”
2. You need to be able to afford more than just a down payment.
“First-time buyers, it is imperative that they research the total costs associated with obtaining a particular loan amount, as this will be additional cash due at closing on top of the down payment. A mortgage provider can provide a verbal estimate in the form of a total percentage of the loan, they can also let you know if you qualify for any "local or state" programs that may assist you with your down payment or closing costs, in some instances they may be able to help with interest rate.
3. Make sure you look at how your entire financial picture will impact your potential mortgage.
And consider pre-qualifying for a mortgage before you even start the house-shopping process. Some of the factors that come into consideration when pursuing a manageable mortgage: “Down Payment, credit score and debt-to-income ratios can all have an effect on the interest rate one receives. The best advice I can provide is to find a trusted mortgage provider and get pre-qualified prior to starting the process. I would also advise you take a look at your credit to ensure there isn’t anything that could negatively affect your terms. If it’s done early in the process, there is time to fix any potential issues.”
4. Get more than just a second opinion.
“Ask trusted sources for referrals to realtors and mortgage lenders." It isn't always a bad idea to talk with more than one before choosing your team. Do this as early in the process as possible so that you have access to these industry professionals for questions and guidance throughout the process.”
5. Understand the process.
Talk with your team of professionals on the process, make sure you understand what you are signing and the process/steps to complete your transaction. Don't be afraid to ask questions if it doesn't make sense. If you do not feel that you can ask questions then re-evaluate who is on your team.