Today’s housing market is a little tougher on buyers than it’s been for the last two years. Rising interest rates mean higher monthly payments. But home values are still expected to climb, just at a slower pace than we’ve been seeing. So buying now still means you’re building equity. Remember, even if it’s your forever home, it doesn’t have to be your forever loan. And remember, we’ve been tracking the 30 year fixed interest rate since 1974, and we’re still well below the average. Here are 3 things buyers can do in today’s real estate market.
1. Get a co-borrower
Maybe you’re just starting the home loan pre approval process, or maybe your pre approval price point is lower than the available homes in your market. One solution is to add a co-borrower. Adding a co-borrower (or co-applicant, co-signer, or guarantor) can be beneficial as doing so could bring additional income and assets to the table. The combined income between the two borrowers may allow you to qualify for a larger loan amount, since you can afford higher monthly mortgage payments together.
2. Change your search criteria
Expanding your search location, criteria, or wish list could open up more opportunities and could help you afford more of what you want and need in a home. According to a recent article by CNET, area growth is likely to keep pace with the market, meaning the “outskirts” of town will likely experience home price appreciation and demand. You’re likely to find better prices and more square footage a little further out.
3. Look for gift funds, down payment assistance, and newer financing options
Guidelines regarding gift funds have become a bit more relaxed in terms of who can provide the funds and the documentation involved. Down payment assistance programs like the ones in Arizona, California, and Texas are helping many home buyers achieve their dreams, and they’re readily available. Additionally, physician loans and loans for Hometown Heroes are available through Fairway. Taking advantage of temporary rate buydowns that are seller paid are another great way to exercise your financing options.
The real estate market is always shifting. Connecting with a local real estate agent and a reputable lender might be just what you need to make an informed, and affordable decision.
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