If you want to be ready to buy a house in the next few years, you may be wondering, “How can I get ready to become a stronger buyer?” Unfortunately, many people do not ask themselves this question until it is time buy. Well, if you are planning to become a home buyer in the next year or two here are my biggest tips.
#1 Do not make any large purchases
We are talking about cars. If you go out and buy a brand-new car now you are committed to a car loan for five, six, or maybe even seven years. And, some people are taking out even longer car loans.
Well, if you want to a home owner in the next year or two, get rid of that new car. Seriously, get rid of it and buy yourself a used car. Or, if you can, pay off the car. If you have a car where it is coming to the end of your lease or the end of the loan, do not buy a new one.
#2 Pay down your credit card debt
This is a very important tip. Do not keep credit card debt, get it paid down. Your credit card debt comes into play with your debt to income ratio when you are trying to get approved for a mortgage.
So, if you are thinking about buying a house in the next year or two pay down those credit card debts. This will help you tremendously when it comes time to get a mortgage. And, guess what? It will help you get a better mortgage rate, too!
#3 Save as much money as possible
The more money you have in the bank, the stronger the buyer you are because when you submit an offer, you are going to be required to fill out a buyer’s financial information statement. Obviously your mortgage representative is going to know what your finances are, but the listing agent on that property is going to know, too. When they are getting multiple offers and comparing your financial statement to ones in other offers you are going to want a competitive edge. Having more money in the bank could give you that edge. If they see an offer from another buyer with more money to make the sale happen, they are going to pick that buyer.
So, save up as much money as possible. Even if you do not plan on putting 20% down at least have as much money as possible. (As far as putting 20% down, you should try to do that because it will help you reduce your mortgage payment.)
It is important to more money saved so you can be a stronger buyer. Also, if anything pops up after become a homeowner you will have some extra money in the bank for any repairs.
#4 The Biggest Tip of All
If you have been sitting on the sidelines and you have your finances in order, you do not have any car loans that you are paying, you have paid down your credit card debt, you have saved as much money as possible, do not wait any longer to buy.
It may not pay off as much as you think if you are waiting for interest rates to go down. My advice would be to stop waiting. Some analysts are predicting rates are going to go up to 10%. When I was in my 20s and I bought my first home, my interest rate was 8%. Back in the 1980s, interest rates were up to 18%! So, do not think they cannot go any higher than the are right now.
If you have been wanting to buy a house now and been waiting for it to go back down to 3%, do not hold you breath. It is not going to happen. At least, not anytime soon. You are going to be waiting a long time. If you need a house, do it now because if or when the rates go down you can always refinance.
I am telling you right now, if you are waiting a couple of years because you think rates are going to go down, guess what? Prices are going to be up. It is just the way it is; we are in a hyper inflation market and prices will be higher. At least you can lock into the price right now and get a house sooner than later.
My name is Dawn D’Amico. I am a licensed realtor in New Jersey and Pennsylvania. If you are buying, selling, or investing and you need my help please reach out to me.
Dawn D’Amico: 215.962.9307
damico.dawn@gmail.com
