• CMG MORTGAGE, INC. NMLS #1820

Pre-Purchase Planning for the Perfect Home

  • March 29, 2018

This spring home buying and selling season is expected to be one of the most competitive in over a decade.  The National Association of Home Builders (NAHB) reports that 61% of home buyers looking to buy in the next 12 months, have been searching for three months or longer, and their sample includes buyers looking for newly constructed and previously-owned homes.

Among the top impediments reported by home shoppers are the inability to find a home at a price they can afford (42%), the inability to find a home with the features they want (36%) and getting outbid whenever they make an offer (27%).  Buyer traffic is strong, inventory is limited, and the National Association of Realtors (NAR) found that the average home purchase contract signed in January had been on the market for only 42 days. 

How can you find the home of your dreams while shopping in today’s tight market?  Taking these pre-purchase steps can lead to a smooth, successful transaction.

Start Credit Repair and Debt Consolidation Early

Lenders review the credit score to determine a home buyer’s ability to repay a loan.  Most real estate professionals suggest starting credit repair six months to one year in advance of a home purchase.  Consolidating debt ahead of the house hunt can also improve your debt-to-income ratio and help secure a better rate.

Set a Budget

When planning for a mortgage payment, it is important to consider all the components of that payment including the monthly principal, interest, taxes, and insurance or “PITI.”  Many homeowners will also have to pay Homeowners Association fees and the ongoing repair costs of maintaining a home.  Determine what you can actually afford in advance, and shop within your budget.

Home Inspections are Not Optional

Removing contingencies can help expedite a home purchase, especially in a heated housing market.  However, a thorough home inspection can bring to light everything from the potential for pest problems to needed repairs.  Forgoing a home inspection now to remove a contingency, can lead to unplanned renovation costs later. 

It’s How You Live Not Where You Live

Getting emotionally attached in a home search happens, especially when the house has great curb appeal.  Consider your lifestyle preferences when narrowing your search.  A great view will not matter as much to someone who is never home compared to someone who works out of a home office.  School district grades are more important if you have young children compared to adult children who are no longer attending school.  Take into account you and your family’s living habits and preferences before falling in love with a house because of the way it looks.

Get Pre-Approved

A letter of pre-approval will let buyers know the maximum you have been pre-approved to borrow, and also help make your offer more competitive.  Sellers will know that you are serious and have already started the mortgage financing process with your lender.  Getting pre-approved will also help you set a realistic budget. 

If you are preparing to buy or sell a home this spring, be prepared for a competitive market.  Partnering with the right real estate team can help ensure a smooth transaction on both sides of the closing table. 

 

Sources: Dwell, MarketWatch, MarketWatch

Doug Luza
Branch Manager
NMLS # 311377
Branch NMLS # 1198991


Doug Luza

PHONE: (832) 575-2210
dluza@cmgfi.com

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