Inventory is finally picking up and more could be on the way
The supply of homes for sale remains at a historic low, but homebuyers should be seeing more selection in their search as new existing home listings jumped 4% year-over-year in June. New listings are also up 3% from where they were in 2019, beating pre-pandemic levels for the first time.
The fresh inventory comes as homeowners get more comfortable with selling, and more hopeful about finding a new home to move into. With vaccination rates on the rise, in-person viewings are becoming safer, so increased listings could snowball into more supply on the market as homeowner confidence builds.
If you’re on the hunt for a home today, it’s important to move quickly. Make sure you have everything you need with this 8-step guide to home buying (see below). It details how to organize your finances, optimize your house hunt, and raise your chances of a winning offer.
To make things faster and simpler for you, here are the steps to buying a home:
1. Get your finances in order
The easiest way to get off to a good start is by getting your finances in order. Your credit score is a core element of your financial health, and improving it is necessary if you want to qualify for competitive loans. A good credit score signals that you are more trustworthy, which could help lower the interest rates you qualify for. The higher your credit score, the better your interest rate options.
2. Calculate your budget for a house using a home affordability calculator.
Fully understanding your finances can help you budget correctly, which is essential when buying a home.
An affordability calculator can be a valuable tool in estimating your monthly mortgage payments and can give you a better understanding of how much you should expect to spend. It's a great way to get a benchmark of how much to save for your down payment and start to narrow down where to kick off your home search.
3. Get pre-approved
A mortgage pre-approval is a letter that gives you an estimate of how much you can borrow for your future home; it does an assessment of your financial picture and in turn, gives you a sense of how much you can truly spare. Most sellers or real estate agents require a pre-approval to see a home as an indication of buyer intent and affordability; as a result, you should consider a pre-approval letter as one of the many things needed to buy.
4. Search for homes within your budget
One of the essential steps to buying a home is finding one that fits within your budget but still meets your needs. Tips you might want to keep in the back of your mind are:
Find a real estate agent who can walk you through the process.
Choose which neighborhood you want to live in.
Identify what type of home you’re considering.
5. Make an offer on a home
A real estate agent’s job isn’t limited to showing you potential houses. While showing you different options that suit your taste and fall within your budget is an integral part of the job, they can also protect you from common pitfalls when you are ready to make an offer.
6. Submit your mortgage application
Once your offer is accepted, you can formally start the mortgage application process. At this stage, you’ll need to determine which loan product would be best suited for your needs, the length, and the rate that meets your budget.
7. Enter the loan processing phase
Once the completed loan application is submitted, it moves into loan processing. Typically, the lender will send you a list of required documents, personal tax returns, bank statements, and then conduct a hard credit check. Each of these is needed before your loan is reviewed by an underwriter who will determine whether your mortgage is approved.
8. Closing
On closing day, you'll sign all of the documents in the closing package. A short time later, your lender will fund your loan after you've made any required down payments or closing costs (in the form of a cashier's check or bank wire). Once that is done, and your agent confirms your lender has made a deposit, your home purchase will officially be complete and you’ll get the keys!
Information Provide by Better Mortgage.