Trying to buy your first house can be stressful at the best of times, but rising interest rates and economic uncertainty have created an unpredictable and chaotic experience. Luckily, one industry expert is offering key tips to conquer this process.
“The rise in interest rates and housing costs is making too many would-be first-time buyers back out, and miss out on the opportunity of owning a property,” says Ciera Taylor, a Los Angeles-based Senior loan officer and Vice-President for Primestone Mortgage. “I want to reassure people that no matter their budget, no matter the property, they can still buy their ideal home.”
Ciera touts ten essential tips for navigating the increasingly volatile housing market and climbing that first step on the property ladder. Her tips are backed by more than fifteen years of experience in real estate and the financial sector, as well as a history of being a first-time homebuyer – one who achieved her ownership goals.
- Realize it’s a buyer’s market
There are more homes for sale than willing buyers, so realize you’ve got a larger-than-normal inventory to choose from. In fact, the supply of homes for sale has increased by 46.8% compared to 2021. Don’t rush to buy the first property you see.
- Don’t be afraid to negotiate
In addition to the buyer’s market providing more choices, sellers are more eager to sell, creating an opening to negotiate a lower sale price. According to realtor.com and Ciera’s Winter Buyer’s Guide, 95% of sellers said buyers requested a home inspection, and 67% negotiated with buyers as a result of the inspection findings.
- Know your credit score
An inevitable part of the home-buying process is applying for a mortgage and related loans, and your credit score will determine how much, if anything, you qualify for.
- Get pre-approved for buying
Understanding the limits of your budget is essential when looking for properties. Working with a trusted lender allows you to understand your true price range, and getting pre-approved will effectively set your upper cap on what you can afford.
- Buy a multi-family home
Consider investing in a property that can be divided into multiple homes. You can live in one of the units and rent out the others, generating extra income for you.
- Be open to many areas
Try not to limit the search for your ideal home to just one or two neighborhoods, as your perfect property might be waiting in another area. As Ciera quotes in her Winter Buyer’s Guide, “Area growth is likely to keep pace with the market, which means that the outskirts of town might be hopping within five years… You may find better prices and more square footage” (CNET).
- Find a trusted lender
When applying for a loan to cover the cost of buying your first property, make sure you spend time finding a well-rated and respected lender with solid credentials.
- Consider a piggyback loan
You might qualify for a piggyback delayed home equity line of credit, also known as a HELOC, letting you avoid mortgage insurance when purchasing your home.
- Use a temporary buydown option
To help lower the often high costs of first-time home buying, consider a temporary buydown to make the mortgage payments more affordable. You may use seller credits to execute this strategy to temporarily reduce your rate up to 2% lower than your fixed note rate for the first two years.
- Increase the seller credits
Seller credits can help reduce the expense of buying a property because they represent money that the seller will pay to help cover the costs of the sale.
Need more information? Find even more tips, tricks, and statistics in Ciera’s Winter Buyer’s Guide, which outlines everything a new homebuyer needs to know. As Ciera says, “Even though the property market is unpredictable, it’s still a good time for people to buy – if they do it correctly and use these strategies to help themselves.”
Click here to download Ciera’s Winter Buyer’s Guide.
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