Springing into the homebuying season
As winter gives way to spring, the homebuying market tends to heat up as well.
If you’re thinking about buying a new home, it’s a good idea to start by making a list. First-time homebuyers should determine their needs, especially regarding size, location and amenities. Even seasoned homeowners will find that having a list of their preferences can save significant time by helping them find a new home that meets their wants and needs. Homebuyers should prioritize the items on their lists because it’s likely that they’ll need to compromise on some items to fit within their budget.
Stricter credit requirements are making it more challenging for some buyers to secure home loans. Lenders are more cautious since the economic downturn of the late 2000s, so having a favorable credit score can make a difference in a homebuyer’s ability to be approved for a loan.
It’s a good idea to check your credit score periodically to ensure that all the information is correct, and that there aren’t mistakes or erroneous information in the report. As a general rule, borrowers should strive for scores in the mid- to upper-700s to secure the best rate.
In the past two months, we’ve seen some interesting developments in the financial markets and oil industry that are impacting mortgage rates favorably for borrowers. For now, the window of opportunity for historically low interest rates has been extended. We don’t expect to see any extreme increases in rates in the near future, but there are many in the industry who agree that won’t last for long. Interest rates are expected to move up, albeit gradually. Those in the position to buy a new home or refinance should try to take advantage of the available opportunities while they last.
Upon approval for a mortgage loan, the lender will set the maximum loan amount for the home purchase. Borrowers are likely to be required to handle the down payment on the house. Down payment rates can vary significantly, depending on the source of the financing.
Financial experts advise that the total monthly home expenses should not exceed more than one-third of the homebuyer’s gross monthly income. Borrowers also need to consider how much money will be needed to cover any loan fees and closing costs.
If buying a new home is contingent on the sale of a current home, it’s a good idea to start the process by developing the best strategy to sell the current home quickly, but at the right time and for the best price possible. Home maintenance issues must be addressed, and some upgrading may be necessary. The costs for maintenance, repairs and upgrades need to be considered when evaluating the budget to purchase the new home.
Please send your questions or comments about new homes to monica@snhba.com. We will try to answer as many questions as we can given space and time limitations and constraints. For more information about SNHBA, visit www.snhba.com.
Frank Wyatt, a principal at Pinnacle Homes in Las Vegas, is the 2016 president of the Southern Nevada Home Builders Association, the largest and oldest trade organization representing the residential construction industry in Nevada. He’s been involved in the local homebuilding industry since 1982.