Why Pre-Approval Is Your Home buying Game Changer--First Step

Why Pre-Approval Is Your Homebuying Game Changer If you’re thinking about buying a home, pre-approval is a crucial part of the process you definitely don’t want to skip. So, before you start picturing yourself in your new living room or dining on your future all-season patio, be sure you’re working with a trusted lender to prioritize this essential step. Here’s why. While home price growth is moderating and mortgage rates have been coming down in recent weeks, affordability is still tight.  At the same time, there’s a limited number of homes for sale right now, and that means ongoing competition among hopeful buyers. But, if you’re strategic, there are ways to navigate these waters – and pre-approval is the game changer. What Pre-Approval Does for You To understand why it’s such an important step, you need to know more about pre-approval. As part of the homebuying process, a lender looks at your finances to determine what they’re willing to loan you. From there, your lender will give you a pre-approval letter to help you understand how much money you can borrow. Freddie Mac explains it like this: “A pre-approval is an indication from your lender that they are willing to lend you a certain amount of money to buy your future home. . . . Keep in mind that the loan amount in the pre-approval letter is the lender’s maximum offer. Ultimately, you should only borrow an amount you are comfortable repaying.” Getting pre-approved starts to put you in the mindset of seeing the bigger financial picture, one step at a time. And the key is actually more than just getting a pre-approval letter from your lender. The combination of pre-approval and strategic budgeting is your golden ticket to understanding what you can actually afford. It saves you from painful heartaches down the road so you don’t fall in love with a house that might be out of reach. Pre-Approval Helps Show Sellers You’re a Serious Buyer But that's just the beginning. Let’s face it, there are more people looking to buy than there are homes available for sale, and that creates competition among homebuyers. That means you could see yourself in a multiple-offer scenario when you get ready to make your move. But getting pre-approved for a mortgage can help you stand out from other buyers. In today's fast-moving housing market, having that pre-approval in your back pocket can be your secret weapon. When sellers see you're pre-approved, it tells them you're a strategic and serious buyer. In a world of multiple offers, that's a big deal. As an article from the Wall Street Journal (WSJ) says: “If you plan to use a mortgage for your home purchase, preapproval should be among the first steps in your search process. Not only can getting preapproved help you zero in on the right price range, but it can give you a leg up on other buyers, too.” Pre-approval shows sellers you’re more than just a window shopper. You’re a buyer who’s already undergone a credit and financial check, making it more likely that the sale will move forward without unexpected delays or issues. Sellers love that because they see your offer as a reliable one. A win-win, right? Bottom Line So, before you start mentally arranging furniture in your dream home, work with a trusted lender to get your pre-approval set. It’ll save you time, stress, and a lot of headaches that could come up along the way without it. The reality is, the more prepared you are, the more likely you are to land the home you’re longing for.

Learn about Down Payment as a home buyer

What You Need To Know About Down Payments  Some Highlights If you want to buy a home, you may not need as much for your down payment as you think. There are various loan options for qualified buyers with down payments as low as 3.5% or even no down payment requirement. There are also thousands of programs available to help homebuyers with their down payments. With the right resources, your down payment may be more within reach than you realize. To learn more about your options, let’s connect.

Today's Mortgage Rates explained

Today's Mortgage Rates explained  If you’re following mortgage rates because you know they impact your borrowing costs, you may be wondering what the future holds for them. Unfortunately, there’s no easy way to answer that question because mortgage rates are notoriously hard to forecast.   But, there’s one thing that’s historically a good indicator of what’ll happen with rates, and that’s the relationship between the 30-Year Mortgage Rate and the 10-Year Treasury Yield. Here’s a graph showing those two metrics since Freddie Mac started keeping mortgage rate records in 1972: As the graph shows, historically, the average spread between the two over the last 50 years was 1.72 percentage points (also commonly referred to as 172 basis points). If you look at the trend line you can see when the Treasury Yield trends up, mortgage rates will usually respond. And, when the Yield drops, mortgage rates tend to follow. While they typically move in sync like this, the gap between the two has remained about 1.72 percentage points for quite some time. But, what’s crucial to notice is that spread is widening far beyond the norm lately (see graph below): If you’re asking yourself: what’s pushing the spread beyond its typical average? It’s primarily because of uncertainty in the financial markets. Factors such as inflation, other economic drivers, and the policy and decisions from the Federal Reserve (The Fed) are all influencing mortgage rates and a widening spread. Why Does This Matter for You? This may feel overly technical and granular, but here’s why homebuyers like you should understand the spread. It means, based on the normal historical gap between the two, there’s room for mortgage rates to improve today. And, experts think that’s what lies ahead as long as inflation continues to cool. As Odeta Kushi, Deputy Chief Economist at First American, explains: “It’s reasonable to assume that the spread and, therefore, mortgage rates will retreat in the second half of the year if the Fed takes its foot off the monetary tightening pedal . . . However, it’s unlikely that the spread will return to its historical average of 170 basis points, as some risks are here to stay.” Similarly, an article from Forbes says: “Though housing market watchers expect mortgage rates to remain elevated amid ongoing economic uncertainty and the Federal Reserve’s rate-hiking war on inflation, they believe rates peaked last fall and will decline—to some degree—later this year, barring any unforeseen surprises.” Bottom Line If you’re either a first-time home buyer or a current homeowner thinking of moving into a home that better fits your current needs, keep on top of what’s happening with mortgage rates and what experts think will happen in the coming months.

Is now the time to buy?

The real estate market has been experiencing a lot of changes lately. As a potential buyer, you might be wondering whether this is the right time to take the plunge and invest. Well, the answer is simple: Yes, now is the time to buy! One of the biggest advantages of buying now is the reduced pricing. With the ongoing pandemic, many sellers are willing to negotiate and offer lower prices than they would have a year ago. This is a great opportunity for savvy buyers to get a good deal on their dream home. Another benefit is less demand and higher inventory. Due to the pandemic and the economic downturn, many people have put their plans of buying a home on hold. This means there are more houses available on the market, giving buyers more options to choose from. Furthermore, with less competition, buyers have a better chance of closing a deal at their preferred price. Moreover, programs such as buy-down rates and down payment assistance are available to help buyers with their purchases. Many lenders are offering attractive interest rates to encourage buyers to invest in real estate by using a buy-down rate strategy for the savvy buyer. Additionally, some state and local governments are providing financial assistance to first-time buyers through down payment assistance programs. Although the current situation might seem uncertain, it's important to remember that the real estate market is resilient and has always bounced back from crises. Buying now means you can take advantage of the current situation and lock in prices before they start to rise again. In conclusion, if you're a buyer looking for a great opportunity, now is the time to buy. With reduced pricing, less demand and higher inventory, and incentives, you can make a smart investment in your future. Don't hesitate, to get in touch with a trusted real estate agent like myself and use my experience to help your home buying journey today!