When youâ€™re up against tight inventory (not enough homes on the market) and higher prices for entry-level homes, how can you get an edge? What if youâ€™re currently renting or you have minimal equity from a home sale to help fund your down payment?
Tip 1â€”Get your down payment in order. Saving for a down payment is good, but you donâ€™t need to wait to save for 20 percent down. There are many low down payment loan programs available with 3 percent down and some at 1 percent down. I speak to borrowers all the time and they are totally shocked on how little the monthly increases (compared to paying 20 percent) on a low down payment loan. In addition, if you have some cash, a low down payment allows you to deploy your cash into other opportunities, or just furnish the home the way you want.
Tip 2â€”Prepare a home financing plan, so you can act quickly when the right home becomes available. Ask your agent and lender about options in your community. Also, check with your employerâ€”some offer Employer Assisted Housing programs as an employee benefit.
Tip 3â€”Time to get a homebuyer education. You can do homebuyer education online on your own time. You may feel like jumping into the market immediately, but data shows that homebuyers who take the time for education and counseling become successful long-term homeowners. Youâ€™ll learn about the home-buying process, mortgage terms, budgeting and more. Plus, many down-payment programs require the recipient to participate in homebuyer education anyway.
Tip 4â€”Get preapproved! Get recommendations from your attorney, CPA, real estate broker, friends or family. Speak to two to three loan officers and see who offers you the best advice and product alternatives, and who you feel comfortable with. They will want your financial information so they can pull your credit and prepare your pre-approval. You need to show that you are actually approved for a home loan.
Tip 5â€”Technology can keep you in the loop and up to date on home inventory. Set up alerts so you know as soon as a listing is online. You can also sign up for accounts at the major listing portals like Zillow, Trulia and Realtor.com and register for alerts when new homes come on the market in your area. In a tight market, you want to be the first to know.
Tip 6â€”Be resilient! So, what if your first offer doesnâ€™t get accepted? It may be hard to compete against multiple offers in a fast-moving market. So what? Keep your options open and consider looking at â€śstale listingsâ€ťâ€”these are listings that may not have sold in the first few days, weeks or months on the market. There are home renovation loans that allow you to buy homes in mediocre condition and upgrade to your style and liking. When everyone rushes to bid on listings when they first hit the market, it may pay off to go back and revisit homes that you overlooked. Keep an open mind to looking at other home styles, and neighborhoods.
So what are you waiting for? If you fail to plan, you plan to fail. Start your home-hunting plan and get out there and compete for the home you want. Good luck!
By Carl Edward Guzman
Carl Guzman, NMLS# 65291, CPA, is the founder and president of Greenback Capital Mortgage Corp. He is a residential financing expert and a deal maker with over 28 yearsâ€™ experience. He currently has 170 five-star reviews on Zillow. Carl and his team will help you get the best mortgage financing for your situation and his advice will save you thousands! Visit www.greenbackcapital.com or email [emailÂ protected]