Are you considering buying a home this Summer?
Summer is a favored time for buying a home due to the pleasant weather, greater property selection, and ideal timing for families with school-going children. But the Summer homebuying season is also a time of increased competition among buyers. To succeed in the Summer homebuying season, you’ll want to be financially prepared to purchase a home as soon as you find the one you love.
This includes being financially prepared with a mortgage pre-qualification and a strong offer.
Financial Preparation for Homebuying
Being financially ready for the summer homebuying season involves several steps. Let’s focus on three key areas:
1. Knowing and Enhancing your credit score: Your credit score is vital in securing a mortgage and getting a favorable interest rate. Obtain a free credit report from the three major credit bureaus – Experian, Equifax, and TransUnion, and check for any errors. You can do this at www.annualcreditreport.com. Pay down your debts and ensure timely payments to improve your score.
2. Saving for a down payment and closing costs: The amount you put down on a home will depend on your loan selection. While low downpayment options are available, such as the VA Loan that starts at 0% down, the FHA loan that starts at 3.5% down, and a conventional loan that starts at 3% down, a larger down payment can help you secure better loan terms and a lower monthly payment.
Don’t forget to account for closing costs, which include appraisal, inspection, and legal fees. Closing costs typically vary between 2-5% of the total loan amount. It is important to know how much you can set aside for your down payment and closing costs before you start looking for homes. Keep in mind that moving comes with additional expenses as well, so you’ll want to make sure you still have some extra money set aside.
3. Securing mortgage pre-qualification: A pre-qualification gives you a clear budget and makes you a serious buyer. This involves submitting a loan application to a lender who will assess your financial situation and determine the loan amount you qualify for. Even if you’ve been pre-qualified in the past, it is important to keep your loan officer up to date on any changes in your financial status or home search criteria so that they can help you understand how these changes might impact your pre-qualification status or loan options. Your loan officer’s goal is to make sure you’re fully prepared to go under contract once you’ve found a home you love.
With these important financial steps, you’re set to make informed decisions during the summer homebuying season.
Maximizing Homebuying Resources
There are numerous resources to help you make informed decisions when buying a home in summer. Let’s look at some of them:
Down Payment Assistance Programs: These programs offer grants, loans, or tax credits to eligible buyers, easing the burden of saving for a down payment.
Online Budgeting Tools: Online tools and calculators can help you estimate monthly mortgage payments, assess affordability, and track expenses, simplifying the budgeting process for the summer homebuying season.
Your Loan Officer: Your loan officer can work with you to show you different loan options and scenarios, helping to find one that fits your specific financial needs. A local lender who is available around the clock can provide invaluable support when it comes to understanding your financial needs. Whether you have questions about the loan process, need guidance on choosing the right mortgage product, or require assistance with paperwork, having a lender who is readily accessible can make a world of difference. They can help you navigate through the complexities of the mortgage industry and ensure that you make informed decisions that align with your goals and financial situation.
Additionally, a local lender may have a deeper understanding of the local real estate market, allowing them to provide tailored advice and recommendations that can benefit you in the long run. By choosing a lender who is dedicated to meeting your needs and being available whenever you need them, you can have peace of mind knowing that you have a trusted partner by your side throughout the loan process. By leveraging these resources, you can better prepare for the homebuying season. With the right preparation and resources, you’re well on your way to achieving your homeownership goals.
Kaye Jones
Mortgage Senior Loan Officer
NMLS# 94785
Cell: 252-256-1333
[email protected]
Content provided by TowneBank Mortgage for informational purposes only. The information contained herein (including but not limited to any description of lending programs and products, eligibility criteria, interest rates, fees and all other loan terms) is subject to change without notice. This is not a commitment to lend. TowneBank Mortgage NMLS# # 512138. Equal Housing Lender