It’s no secret that spring and summer are the “home-buying seasons.” But did you know that winter is also a great time to be looking for a new home?
Sure, it’s cold outside and there may be fewer houses on the market, but it’s a great opportunity to get a jump on the whole process, while others are waiting for the warmer weather to settle in.
“If you wait too long and you go through until March, April and May, when the weather starts to warm up, you start to have more people looking for more houses and the competition gets a little bit crazy,” says Tia Marx, Real Estate Salesperson/Peak Partners Team Keller Williams Capital District. “Right now, it’s a little bit slow with people buying, because they think it’s winter, it’s freezing, it’s cold, but right now it’s a great time.”
So, whether you’re purchasing your first home or your next, Tia has some advice as you begin the home-buying process.
FIND THE RIGHT REAL ESTATE AGENT:
The National Association of Realtors reported in July 2020 that 89% of buyers recently purchased their home through a real estate agent or broker. One might argue that finding the right agent is just as important as finding a family doctor, a trusted auto mechanic, school for your children and best pizza spot. So do your research.
“We’re their backbone, their go-to person. We’re there to defend them during their home purchase,” adds Tia. “They may not really realize how big of an investment it really is. It’s our job to protect their investment, making sure they’re making that right purchase, making sure they’re doing everything they need to do to make it a quick and easy transaction.”
GET PRE-APPROVED:
Before you begin looking at the first house, get pre-approved. There’s a difference between pre-qualified and pre-approved when purchasing a house.
A pre-qualification generally means that a lender collects some basic financial information from you to estimate how much house you can afford. A pre-approval dives into your income, tax documents and credit score and actually “pre-approves” you for a specific loan amount.
Tia says, “You’re actually going into the bank, bringing your W2s, your pay stubs, tax documents and you’re giving that all to them. It gives you a number and that amount is important because it gives a starting point, it tells us where to go, what we can look for.
“Nothing is worse than going to look at a house before you have that pre-approval and finding out that it’s not the house you can afford, but it’s your dream home. It’s just a huge letdown.”
SHOP AROUND FOR THE BEST BANK:
Not all banks are the same. Keep in mind that it’s more than just looking for the lowest interest rate. After all, you may have a relationship with that bank for 15 to 30 years, maybe even longer so it’s important to make sure you’re comfortable with the lender that’s originating your loan.
Tia points out that not only do different banks offer different interest rates, but also have different stipulations that affect the fees you are charged and the service you receive.
INVESTIGATE AND IMPROVE YOUR CREDIT SCORE:
First-time homebuyers should check their credit score at least 30 days before they begin the home buying process. Your credit score may go a long way towards determining your interest rate and even lower your chances of getting approved for a mortgage. So, make sure you pay off your debt, your collection items and don’t take out any new lines of credit while you’re in the process of buying a home.
“You see that truck you really want to buy; you know what … hold off on that truck it will be there when you buy your house,” Tia notes. “Don’t make any new purchases, don’t make any large purchases, nothing that’s going to hit your credit score. And pay off your monthly payments every month, even at the minimum. Making those every month is going to increase your credit score.”
HAVE AN IDEA OF WHAT YOU’RE LOOKING FOR, BUT BE OPEN MINDED:
You don’t need to compromise on the things that are important to you, but approach each property open minded.
Tia believes that looking at the first few houses is what pushes the homebuyer forward to what they really want. It gives them a better understanding of their price range and what they may actually be looking for.
“They may start off saying, ‘oh I would really like a fireplace,’ but then they get into a house that has a fireplace and they don’t like the fireplace anymore. After looking at the first few, homebuyers have a better understanding as to what they’re really looking for and what they can afford.”
DON’T LOOK AT TOO MANY HOUSES:
Five to 10 homes is just about right. Anything after that and you may become too confused. If nothing jumps out, and time allows, take a break and jump back in when your mind is clear.
Tia says, “Looking at 10 homes a day, that’s easy, but it doesn’t benefit anyone. Once you get past that five to 10, things start to get scrambled and mixed up in your head so, five to 10 is the magic number.”
Don’t forget to also use technology available to you. Most realtors make their listings available on social media. So, explore using Instagram, Facebook and YouTube.
DECIDE WHETHER YOU’LL FINANCE A 15 OR 30-YEAR MORTGAGE:
You can absolutely save using a 15-year mortgage. Interest rates for 15-year mortgages are generally lower than 30-year mortgages and you’ll wind up paying far less in interest over the life of the loan.
“On a 30-year mortgage, your interest rate may be at four-percent, and you’re paying $288 towards your principal and $688 towards your interest. So over time, you’re actually spending $145-thousand just on interest,” explains Tia. “Whereas, you go and use that 15-year mortgage, you might decrease your interest by a quarter percent, so your total payment will be $1,400 and you’re spending $800 on your actual principal and $600 on your interest. So, that over time it adds up to $61-thousand, instead of that $145-thousand, so it’s a huge savings.”
DON’T FORGET ABOUT HOMEOWNERS INSURANCE:
Most banks require you purchase Homeowners Insurance before closing. Homeowners Insurance covers losses and damage to your home and the assets in it.
“It’s super important because it covers anything that happens to the house. You have a tree falls onto the house; it’s going to cover that. You have a fire in your house, it’s going to cover that,” Tia says.
For a FREE, no-obligation homeowners’ insurance quote visit https://bluelineagency.com/personal-insurance/home-insurance.