Why is This Spring a Great Time to Buy a Home?

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Filed under: Market Comentary

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Spring is in the air and it is definitely a great time to think about purchasing a home and stop paying rent.

Lawrence Yun, the chief economist at the National Association of Realtors recently said, “The cost of renting is really high right now. Rents have been rising and rising. Renters are getting squeezed, and some want to convert to ownership.”

Yun also added, “The Federal Reserve is likely to raise short-term interest rates in the summer, which will be a signal for the rest of the market for rates to go higher.”

According to a recent article in U.S. News and World Report, the best mortgage rates will be awarded to those with higher credit scores. So, how can you secure the best rates?

• Be Aware of Your Credit Score

Gina Pogol, loan expert for LendingTree says, “Minimum credit scores required by lenders have steadily dropped, and mortgage insurers’ underwriting guidelines have also loosened a bit, but it’s still a little tough. Average FICOs of applicants approved for home loans continue to come down, but they’re still hovering around the 700 mark.”

Jeannie Meronk, assistant vice president and mortgage loan officer adds, “To get the best rate, strive for above 740. That is the benchmark for A-plus lending.”

• See Your Lender Before Visiting Open Houses

A lender will let you know what you can really afford and qualify for before you find that dream home that may not fit into your budget. Remember that it is important to consider your monthly budget and determine what level of monthly payment will best fit your finances.

It is also an excellent idea to be pre-approved so talk to your lender on how to do this.

• Keep Your Financial Picture the Same

After you have been pre-approved, you should stay away from new credit cards, changing jobs, and transferring big sums of money.

• Be Prepared if You are Self-employed

Being self-employed, you can expect to provide two years’ of tax returns and if your income is different from one year to the next, an underwriter will average the income.

• Keep Your Financial Paperwork Up to Date

It is a great idea to keep a file that includes your most recent pay stubs and all of your bank statements. Ask your lender what documents you will need so you can be prepared to produce them when asked.

If you have any questions about purchasing a new home, please give me a call and we can discuss all of the intricacies involved in the home buying process.

source:http://money.usnews.com/money/personal-finance/articles/2015/03/03/6-steps-to-get-the-best-mortgage-rates-this-spring from website www.money.usnews.com

 

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