This year, inflation reached a high not seen in forty years. With both mortgage rates and rent prices rising, which makes the “rent or buy?” question trickier and purchasing a home possibly a “scarier” season than ever.
Don’t Be Afraid to Dream
Hopefully you are more spooked by Halloween movies and horror villains, but if you feel like a lost mummy with your finances and homeownership goals, Core Bank can help. While increased rates and home prices may cause some would-be homebuyers to put their plans on hold, you may not be content to do this, especially if your rent continues to increase with every new lease.
While interest rates are a big consideration when buying a home, you don’t want to wither into a skeleton while waiting. There are other important factors to consider:
- Are you ready to put down long-term roots like The Addams Family? If so, it could be well-worth buying now. However, if you are planning a Nightmare on Elm Street sequel and move again in a few years, this strategy may end up costing you any equity you earn, especially if property prices stagnate.
- Are you prepared to take over maintenance? You don’t want to feel like you are living in the Amityville House. Unless you buy a warrantied new home, you may be faced with bills during the first years of homeownership unless the previous owner has recently replaced older HVAC, plumbing or electrical systems.
- What about future possibilities? For example, if you plan to buy with a spouse, what will happen if one of you are laid off? Do you plan to eventually move an elderly parent or Cousin Itt in with you? Will you still have an emergency nest egg after making a down payment?
- What if you find a bargain? Purchases can bleed humans dry like vampires, but in this case instead of red, they go for the green. It could make sense to buy this home with a smaller deposit, even if you can afford to put 20% down. Here’s why: it’s important to have assets on hand to keep your investment in homeownership safe, even if you’re required to pay mortgage insurance during the first years in your new home. This strategy will help you enjoy the perks of homeownership without money worries.
Rules to Survive as a First-Time Home Buyer
You may have heard of the rules to successfully survive a horror movie and similarly there are rules to follow in the home buying process. The first rule in a scary movie to survive is to never trust your love interest. In this case of surviving as a home buyer, a major rule is to speak to a trusted mortgage lender and they can get you started on the pre-qualification process. This way you are armed (in addition to garlic and vampire stakes) with a reasonable price range before beginning your search.
The second rule in a horror movie is that the murderer always has something to do with your past. Remember to check and strengthen your credit score and past credit history. Your credit score will contribute to whether or you qualify for a mortgage, and it also may affect the interest rate that lenders will offer for your home loan.
The third rule in a horror movie to remember is that the first victim always has a circle of friends that the murderer is a part of. In this case, you want to remember your home inspector as your friend. Home inspectors search for details which can help you make a well-informed decision when buying a home. They will go through the house to get a better understanding of what they are looking for and any potential concerns.
Another rule is to make sure your car is in perfect working order. When purchasing a home, you’ll want to buy homeowners insurance before closing a deal. Insurance will protect your home and your pocket in a case of disaster.
And the last rule in a horror movie is to never..ever…split up! Most of us learned this lesson as a little kid watching Scooby Doo as Shaggy and Scooby ran in circles away from spooks while the rest of the gang gathered clues. Strength in numbers might be a tired cliché but remember to stay patient as the homebuying process can be long. Your home is an important investment, so take the time with the appropriate support to make sure it is done correctly.
Slay Your Nightmares
Buying a home can be stressful during the best of times, and it might feel like a poltergeist in a highly competitive market. Although a few of the details may look different right now, the overall process of buying remains the same — and understanding the key steps can help you reach your goal and make your dream a reality. For expert insights on the latest trends in the housing market and what they mean for you, lean on a trusted real estate professional.
Slay your nightmares of the homebuying process with the help of a mortgage lender (don’t worry, they don’t turn into werewolves during a full moon) to discuss your credit and basic finances for free. And while you’re at it, tour the 10 Real Houses from Iconic Horror Movies.