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Buying a New Home This Fall

fall home buying guide

Are you thinking about buying a new home this fall? Worried that you should wait until next spring? Allow me to put some of your worries and other commons myths to rest!

Four Reasons to Buy Now!

Just because the “summer market” has begun to close doesn’t mean that you should wait until the spring to buy your new home. Here are a few reasons why:

  1. Prices are going to continue to rise.
    CoreLogic’s latest Home Price Index reports that home prices have appreciated by 6.7% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.2% over the next year. The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
  2. Mortgage Interest Rates Are Projected to Increase
    Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have hovered around 4%. Most experts predict that rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac and the National Association of Realtors are in unison, projecting that rates will increase by this time next year.
    An increase in rates will impact YOUR monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is necessary to buy your next home.
  3. Either Way, You are Paying a Mortgage
    I know what you’re thinking. You’re renting right now so you’re not actually paying a mortgage at all. That isn’t the case.There are some renters who have not yet purchased a home because they are uncomfortable taking on the obligation of a mortgage. Everyone should realize that unless you are living with your parents rent-free, you are paying a mortgage – either yours or your landlord’s.As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home that you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity. Are you ready to put your housing cost to work for you?
  4. It’s Time to Move on with Your Life
    The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But what if they weren’t? Would you wait?Look at the actual reason you are buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe now is the time to buy. If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial saving.

Myths Holding You Back from Buying a Home

In Realtor.com’s spring article, “Home Buyers’ Top Mortgage Fears: Which One Scares You?” they mention that “46% of potential home buyers fear they won’t qualify for a mortgage to the point that they don’t even try.”

Myths are rampant when it comes to buying a home. I’ll tackle two of the most common ones we hear in the real estate industry:

Myth #1: “I Need a 20% Down Payment”
Buyers overestimate the down payment funds needed to qualify for a home loan. According
to the First Quarter 2017 Homeownership Program Index (HPI) from Down Payment Resource,
saving for a down payment was the barrier that kept 70% of renters from buying.

Rob Chrane, CEO of Down Payment Resource, had this to say:
“There are many mortgage-ready renters today, but they don’t know it. Often, homebuyers
remain sidelined for years due to the down payment.

Many believe that they need at least 20% down to buy their dream home, but programs are
available that allow buyers to put down as little as 3%. Many renters may actually be able
to enter the housing market sooner than they ever imagined with new programs that have
emerged, allowing less cash out of pocket.

Myth #2: “I need a 780 FICO® Score or Higher to Buy”
The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%)
about what FICO® score is necessary to qualify. Many Americans believe a ‘good’ credit score is 780 or higher.avg fico

To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which
focuses on recently closed (approved) loans. As you can see on the right, 52.2% of approved mortgages had a credit score of 600-74.

In fact, we have several lenders we work with that have multiple loan programs geared at all levels of credit scores that you should be able to find something that works for you.

Bottom Line
Whether buying your first home or moving up to your dream home, knowing your options
will make the mortgage process easier. Your dream home may already be within your reach.

Things to Consider When Buying a Home

The four reasons to buy now and two myths above were a sneak peek from my fall edition of fall home buying guideThings to Consider When Buying a Home buyer’s guide. The rest of the guide, which you can download free from my website, goes on to talk about the current market trends, what you need to know going in to buying, and what to expect from the process.

The long and the short of it is this: don’t wait until the spring to buy your next home. If you think you won’t qualify for a loan, don’t let that stop you from speaking to a lender…so you may be closer than you think!

To download the entire fall home buyer’s guide for free, visit my website and let me know that you’d like a copy! As always, please feel free to contact me with any questions you have about buying a new home this fall!

When is the Best Time to Buy a Home?

The Conundrum 
When is the best time to buy a home? This is a dilemma buyers have been facing since the dawn of property ownership as we know it.

Many buyers choose to hit the market in early spring when many homes come on the market after winter in Minnesota. This is born out of a common misconception that early spring is the best and only time to buy a home.

Panic begins to set in if they don’t find what they like as summer comes. Buyers begin to worry that fewer homes will be on the market and they won’t be able to find a good deal during the summer. I’m here to tell you not to worry…late summer might be a better time for you to buy.

When is the Best Time to Buy a Home?
To figure out when the best time to buy a home is for you, you need to examine what you’re willing to experience.

If you’re interested only in having the most options to choose from, then spring is the time for you to hit the market. Home shopping in the spring, however, brings increased competition from other buyers. This leads to battle through multiple offers and will eventually lead to some major frustrations.

If you are willing to sacrifice a little selection in favor of lowering the competition, then the late summer is when you should start looking to buy.

In a June 5th article from Forbes, Zillow did an analysis of listing and price date from 2016. It turns out, the best blend of pricing and inventory selection occurs in the late summer market.

Not every spring listing will sell. Homes that are still on the market will take price reductions. This, coupled with the summer listings that come on the market, means that late summer buyers will have as many homes to choose from as spring buyers.

Eventually, summer listings will take their own price reductions as fall approaches. Long story short: late summer buyers have the same opportunities as the spring market…but often with better prices!

The Bottom Line
Late summer shoppers will have the advantage of dealing with very motivated sellers, something the spring markets don’t always have. It isn’t to say that spring sellers don’t want to sell their homes. They do. However, sellers who have been on the market for a while are much more likely to negotiate on sales price.

Today is August 7th. The late summer market is here! If you’re ready to take the plunge and buy a new home, you can get started today. Start with doing a quick search on my website, see what is available. Send me a message and I can help you get on the road to your next home!