The housing market has ridden quite the rollercoaster the past few years. It was at a high point in 2021 for sellers in terms of housing prices and the ease and speed to sell. As rates tick up, things may be slowing – slightly. For those who are selling in order to buy, first-time homebuyers (FTHB) or those trying to time the market, there are a few strategies you can use that can tip the process in your favor. Or at least make it less like getting a root canal.
How to buy when selling
It can be incredibly intimidating how to figure out what it takes to buy a new home when you still have one you own. Not having a good idea of how much you can afford is a big reason why some sellers decide to stay put. Plus, you may be competing with cash buyers and want to avoid a contingent offer – or an offer contingent on selling your current home.
There are two main questions to consider when buying a home even though you still own.
1. Can you qualify for a mortgage with both mortgage payments?
2. Do you have funds for the down payment from somewhere other than the proceeds from your sale?
If you can answer “yes” for either question, then it’s possible to buy before selling. Of course, this is where working with an experienced mortgage consultant can pay dividends.
What FTHB need to know
Are you buying your first home? The task can seem daunting to many first-time homebuyers. There are three things you need to do to give yourself a fighting chance.
✅ Get an underwritten preapproval, which gives you the assurances you need to move quickly knowing a loan is waiting for you and tells the seller you’re a well-qualified and serious buyer.
✅ Have several strategies for the down payment and maybe even loan types so you can adapt to what homes are available.
✅ Work with a strong lender and Realtor®. It’s always nice to have people in your corner who know what they are doing and will fight for you and your goals.
Finding value in volatile rates
Since your mortgage rate is a big part of your mortgage strategy, staying on top of the market is important if you are looking to buy a home. So, what do you do when rates are all over the place and going up?
Since you can’t lock your rate until you’re under contract in most cases while you’re shopping, there’s not much you can do. But before putting in an offer, check with your lender to get a specific estimate with a current rate. Then once you are in the position to close on a loan, chose the rate and associated closing costs that best suits your budget.
While we can’t change the market, we can control many aspects of the process. I’m not going to sugarcoat it, this is a tough market, but buying is possible so follow me to learn everything you need to know.