The question of when it’s the right time to buy a home has been asked by countless. And the answer to that largely depends on what one means by “the right time.”
When is it the right time to buy according to the market? When is it the right time to buy according to your current financial situation? When is it the right time to buy considering life goals and opportunities?
As you can see, the “right time” is a very personal thing. Let’s go in-depth and look at each of these situations. Remember to contact us for a personalized recommendation and get matched with a mortgage loan program that fits your right time.
The Real Estate Market and the Right Time to Buy
Buyer’s market. Seller’s market. Even seasoned real estate investors can have trouble nailing down the “right time.” But there are a few things to help you gauge whether the market is right for buying:
1. Price trend in your desired area: Comparing the historical home costs gives you valuable insight as to whether you can expect prices to rise quickly or stay steady. It’s useful to compare those trends with other areas in the county to see the bigger picture for asking price and home sales.
2. Home sale trends: If home sales seem to be moving slowly, it’s a good indicator that it’s a buyer’s market and likely the right time to buy. Sellers will be more willing to negotiate, and there will be less competition.
3. New construction slowing down: You’ll want to watch out for lagging construction as this can mean housing will be in short supply, driving prices and competition up.
4. Interest rates: Another number you want to look at is interest rates. Now this one is a little tough since rates are changing all the time, and there’s no absolute way to predict what it will be next week or even tomorrow. However, there are several key indicators that true mortgage professionals look at to gain insight. Working with a trustworthy professional is key as they can guide you when the right time to buy is considering mortgage rate trends.
Your Finances and the Right Time To Buy
The market and current mortgage rates play a critical role as to whether it’s the right time to buy a home, but so do your finances. You may have heard that you need to save 20% for the downpayment. If you don’t have 20%, you may think it’s not the right time to buy. However, certain loan programs let you purchase a home with as little at 3.5% –some even less than that! Even a struggling credit score may not affect your “right time to buy.” Government-backed home loans allow banks to issue great loan packages to buyers with lower than average credit scores. If fear of getting denied a home loan due to low credit has been holding you back, now is the RIGHT time to discover the possibilities.
Life Goals and the Right Time to Buy
With the above mentioned in mind, let’s now consider your life goals. Are you ready to set roots –at least for five years –in one community? Ready to invest with long-term payoff? Tired of renting and the inability to make customize your home? If these sound like you, then now is the right time to buy.
Even in less than favorable real estate markets, great rates and life circumstances may mean that it’s your right time to buy. Get a custom rate quote! Our mortgage office is dedicated to truth in lending and personalized service. Contact Tara Mortgage Services today to learn about your mortgage options and discover if it truly is the right time for you to buy!
The only thing worse than not getting the home you wanted is not getting it because of an avoidable mistake. While working with a real estate agent certainly helps — and we recommend it — buying decisions are ultimately in your hands, so you want to be as prepared as possible.
Do you know someone else that is considering buying a home, too? Send this article to them! They’ll be thankful for the helpful advice and happy that you thought of them.
Top 10 Mistakes When Home Shopping
Not Being Ready To Make An Offer
Looking at properties without a pre-approval letter is like leading a toddler to a candy store knowing you forgot your wallet at home. You won’t like the result. A pre-approval letter is as good as money in the back when home shopping. It communicates to the seller that not only do you love the property but that you’re serious about purchasing it.
True, sellers may want to collect a few offers first, but many are just as eager to sell their property as you are to buy it. Giving a fair and attractive offer fast may be just the thing that will get you into your dream home.
Getting pre-approved is much easier and faster than it was a few years ago too! You can get started right now using our online application. It’s secure, convenient, and the quickest way to know how much you qualify for.
Hesitating Too Long Before Making An Offer
Of course, you’re allowed to hesitate. It ‘s a big financial decision, and emotions can run high. But don’t let uncertainty slow you down too much.
When it comes to real estate purchases, time can stifle and even kill the deal. You see, the longer you wait, the more competitors you’ll find. And a bidding war means you’ll ending pay more or even get outbid, missing out on the property altogether.
This is also where being prepared with your approval letter comes in. If you’re hesitating because you still need to apply for the loan, there’s a high possibility that you’ll miss out on that property.
Going All-In On Your First Bid
The next mistake is to put all your chips on the table –meaning offering your max pre-approved amount on the first round. What you want to do instead is look for homes that are below your maximum approved. That way, you have some wiggle room for bidding a bit higher on the second round (while others will be unable to because they didn’t read this article and bid max on their first round).
These trick also helps when going against all-cash offers, too. All-cash have a reputation of being tough to outbid because they’re attractive to sellers. But if they’ve gone all-in on their first bid, your higher loan-backed bid can take them out of the competition.
Going In Too Low
On the same note, you don’t lowball either. Sometimes home shoppers make an offer to negotiate, and it backfires. Remember that your goal is to buy the home, not get into a negotiation.
Instead, your first offer should be one that is fair for the house and the market while remaining under your max bid amount. Your real estate agent can help you with this one but do your homework as well. Research similar homes in the area to see how much they sold for and how long they were on the market. Compare the features as well as the square footage as it also affects what a fair offer would be.
Passing on The Inspection Contingency
Perhaps they didn’t want to ruffle the seller’s feathers, or maybe they thought that new constructions wouldn’t have flaws. Whatever the reason may be, we’ve seen too many homebuyers make the mistake of declining the home inspection contingency.
A home inspection contingency gives you peace of mind. It uncovers potential flaws that may require major cash to fix. If the damage is severe enough, it could offer a way to legally back out of the deal.
Whether it’s a new home or a jewel from the 1950s, always get a home inspection.
Letting Too Many People Have a Say
This mistake is tied to the second one we mentioned about hesitating. Letting people who are not financially invested in the purchase could slow you down or make you second guess your first thoughts. Yes, having advice from your mother or a friend is valuable, but their helpfulness may be too protective. If your “advisor” is the type to focus on flaws or tell you “shop around” when they think you’ve fallen in love too fast, it might be better to shop without them.
Funding your dream home is what Tara Mortgage Services does, and they’re the best at it! Contact us Tara Mortgage Services to work with a mortgage professional that cares about your home buying goals as much as you do!
Mortgage rates have been relatively consistent, but don’t let that get you too comfortable. Rates are changing all the time…by how much, and whether it will be in your favor, we cannot say. We can make intelligent guesses, but we can’t predict with any certainty.
However, that doesn’t mean that you are entirely powerless when it comes to taking charge of the mortgage rate you qualify for.
You hold a lot of power, including the ability to qualify for a lower rate by improving your credit score, buying points, and exploring the rates of various home loan options.
And here is another idea for getting a low mortgage rate in an uncertain market: get a floating mortgage rate.
Bookmark this post for future reference and read on to understand the difference between a locked-in rate versus a floating rate.
Locked and Floating Mortgage Rate Compared
Mortgage Rate Lock
“Locking” a mortgage rate means the interest rate won’t change from the time we offer it to you until the closing of your loan. When the rate rises—as they’re expected to—your rate won’t budge. Sounds great, right? It is!
However, you should know that there are a few stipulations to a mortgage rate lock, such as:
Closing within the predetermined time frame
No changes to your mortgage application
Rate lock timeframes range from 30 to 60 days, though longer terms are sometimes available.
Even with a locked rate, some circumstances can still cause a locked rate to adjust, namely:
You change the type of mortgage or the amount of your down payment.
Your home appraisal is higher or lower than expected.
Your credit score changes.
There was trouble documenting your additional income such as bonuses or overtime
There is also a fee associated with locking in a rate, and the longer the rate lock term, the higher the fee. Plus, if the rate drops, you won’t be able to take advantage of the lower rate—unless you have a “float down” option.
What is a Float Down Option?
A “float down” option means that you’re able to reduce your interest rate if market conditions cause rates to drop during your lock term. This mortgage rate option is dependent on the daily market fluctuations. So if the interest rate goes up by the time you close on your mortgage, you’ll lose some buying power.
But if the rate falls, you’ll gain some buying power.
Choosing to float your mortgage rate is considered riskier because one can’t truly predict what rates will do from one day to the next. But the potential for savings is very attractive, which is why many mortgage applicants choose it.
When Should You Choose to Float?
When rates are decreasing steadily from week to week, it might be a good idea to float it. There’s a chance you’ll get a better rate when it’s time for the loan transaction to take place.
On the other hand, if rates a less steady or are moving higher, then you’ll want to lock in your rates.
How much can a rate impact your monthly mortgage payment? Let’s look at an example. A mortgage payment on a $200,000 home at a 4.5 percent interest rate would be $1,013. However, at a 4.75 percent interest rate, the payment would be $1,043.
That $30 difference that adds up to nearly $400 over a year!
Need more personalized guidance about interest rates and which you should choose based on the current market? Call Tara Mortgage Services, your local mortgage experts!
It makes everyone cringe at the mere possibility of it — identity theft. Unfortunately, about 1 in 15 Americans are victims of it. And the way most find out that it’s happened to them is when their credit is pulled, and they notice something suspicious. Indeed, identity theft can even negatively affect your home loan application. Here’s how identity theft affects your mortgage application and the steps you can take to help you get approved despite the fraud.
Types of Identity Theft And How It Affects Your Home Loan Application
There are many types of identity theft. While all are serious, only one can hamper getting a home loan. With financial identity theft, a criminal is using your identity to get approved for credit. While a $300 shopping spree probably won’t affect your ability to get approved for a mortgage, it could lower your credit score and change the mortgage rate you qualify for.
However, fraudulent charges of thousands or tens of thousands of dollars are sure to halt your loan approval and here’s why:
Part of getting approved for any loan is demonstrating that you can be trusted to pay it back. And, essentially, that’s what a credit score shows. The higher the score, the more financially responsible you appear to be, and the more lenders will trust that you can and will pay back the loan.
So when it comes to mortgage approval, you can imagine how much weight your credit score carries. And if your credit shows that you have a $12,000 debt that’s currently in collections, that’s a red flag that no lender wants to see.
Home loan denied. Well, for now, anyway.
Fortunately, that’s not the end of the story! While it’s not a fast process, there are steps you can take to help clear up the crime from your credit history and get you well on your way to home loan approval.
What You Can Do If You’re a Victim
First thing you want to do it report the crime to the police. You’ll also want to file an affidavit with the Federal Trade Commission. Sometimes, a copy of the police report and the affidavit is all that the underwriter needs to move your application towards approval. Unfortunately, even with proof of a crime and loan approval, your rate may remain on the higher end of the scale because rates are determined when you first applied for the home loan.
Now we come to a fork in the road. Accept the higher rate and move forward with the home purchase. Or wait until everything gets cleared from your credit history and start the process all over again.
Both options have their advantages and disadvantages.
If you decide to purchase now, you’ll have the certainty of buying in the current favorable conditions. Your rate may be high now but, then again, it could be high later too. The market is changing all the time, and we cannot predict what your future rate would be.
However, if you decide to take the extra steps to clear your history and wait to purchase, you’ll have the peace of mind that you are getting the best rate based on your actual credit score. Your rate may also be lower than it was the first time around, possibly saving you thousands of dollars over the life of the loan.
Plus, you also have to consider the housing market. The availability of homes for sale in your price bracket may not be the same in six months. Are you willing to wait and see?
Identity theft isn’t something that’s fixed overnight. After you’ve filed a police report and an affidavit with the FTC, you still need to submit copies to the credit bureaus. This will trigger an investigation and should also stop them from showing the fraudulent info on your report. The time it takes for your report to be completely cleared varies quite a bit. It can take as little as weeks, but in some cases, it’s taken years.
We hope that you are never a victim of identity theft, in any form. However, know that there is light at the end of the tunnel when it comes to buying your dream home even if this does happen to you. Do you know what rate you qualify for? Contact us today to see how low your rate can be!
Even if you’re done with college or if your children are years away from higher education, there are still many benefits to living in a college town. And don’t think that college towns are all small towns. College towns can be as urban as Tallahassee, Florida, thriving with business while remaining surprisingly low-cost.
Here are some of the financial benefits of buying a home in a college town, and remember to contact Tara Mortgage Services for even more savings options! Low mortgage rate and steady home prices (so far) make it a great time to buy a home.
Low-Cost Entertainment and Cultural Events
Colleges are known as “tastemakers” in the entertainment industry and often attract touring musicians, theater performances, and speakers, many of which wouldn’t typically come to smaller cities. Surrounding businesses host these events as well. Local theaters, bars, and city parks are great places to catch concerts that are open to the public. Let’s not forget that the colleges aren’t just hosting; they’re producing performances as well. Tickets are less expensive than even the most modest-priced Broadway show and are a great way to support your local artists.
State of the Art Medical Services
Medical schools are yet another low-cost benefit of living in a college town. Under the supervision of a licensed practitioner, medical students offer a wide variety of medical services in the university-sponsored clinic or large hospital. And since university medical facilities are the benefactors of non-profit donations, they usually have the most advanced medical equipment while remaining relatively low-cost.
Smart Rental Property Investment
If you decide to rent your property, a college town will ensure it will never be without a renter. The demand for housing is steady, and in the case of public universities, the need can be high. The caveat is that the turnover rate for renters is higher in college towns. But if you purchase a rental property in a college town like Boston or Denver, the likelihood of finding a long-term renter easier.
Whether you are buying a property for living in or renting, this could be the smartest investment of you life. Contact Tara Mortgage Services today to learn about mortgages and investment properties in our city!
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