With a strengthening employment market, many economists are predicting that Buyers will see a much more active housing market in the coming months. In a recent article, Bankrate.com highlighted several tips to aid Buyers which include:
- Put the ego aside during negotiations, do the math. Home shoppers need to factor in the low interest rates and how much they could be saving rather than waggling over a home price that may only be about a $5,000 difference. For example, Bankrate.com notes that at an interest rate of 4.5%, the difference between paying $200,000 and $195,000 with 15% down – only amounts to about $25 per month on a 30-year mortgage. Is $25 worth it for losing the home they want? Also, mortgage rates are near record lows right now, some even below 4%. But borrowing costs are expected to move up; Moody’s Analytics predicts mortgage rates will rise to 6% by 2017.
- Avoid big-capital purchases before closing. This can delay or even prevent a closing. Buyers that open new credit cards or buy furniture prior to closing can raise their debt-to-income ratio. This information is examined by lender prior to closing and can affect the amount of mortgage that is affordable. Buyers (that are financing their new home) should avoid moving large sums of money around, changing banks, or changing jobs or becoming self-employed when in the midst of buying a home.
- Take lots of notes. Several tours of properties can be overwhelming and the homes can start blend together by the end of the day. I encourage Buyers to keep a pro/con checklist for each home they view. I also advise them to create a scale of 1-10, in order to give each home a specific rating. Plus, Buyers might want to carry a checklist of the specific features desired in order to check which qualities each home has.