…getting a loan pre-approval so you know what you can truly afford (what you should know about the mortgage process.)
(or getting the proof of funds letter from your bank if you are not taking out a loan – cash buyer).
| In many markets across the country, the amount of buyers searching for their dream homes greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search. Even if you are in a market that is not as competitive, knowing your budget will give you the confidence of knowing if your dream home is within your reach. Freddie Mac lays out the advantages of pre-approval in the My Home section of their website:
One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.” Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and it often helps speed up the process once your offer has been accepted.
Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.
It’s that time of year; the seasons are changing and with them come thoughts of the upcoming holidays, family get-togethers, and planning for a new year. Those who are on the fence about whether or not now is the right time to buy don’t have to look much further to find four great reasons to consider buying a home now, instead of waiting.
1. Prices Will Continue to Rise
CoreLogic‘s latest Home Price Index reports that home prices have appreciated by 6% over the last 12 months. The same report predicts that prices will continue to increase at a rate of 5.4% over the next year. The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects home values to appreciate by more than 3.5% a year for the next 5 years. The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Remain at Historic Lows
Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have remained at or below 3.5% for 13 consecutive weeks. The Mortgage Bankers Association, Freddie Mac & the National Association of Realtors are in unison, projecting that rates will increase by this time next year. Any increase in rates will impact YOUR monthly mortgage payment. A year from now, the percentage of your income that you spend on housing will increase substantially if you choose to wait.
3. Either Way You Are Paying a Mortgage
Everyone should realize that, unless you are living with your parents rent-free, you are paying a mortgage – either your mortgage or your landlord’s. As a paper from the Joint Center for Housing Studies at Harvard University explains: “Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does–as Americans intuit–end up making more financial sense than renting.”
4. It’s Time to Move on with Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise. But what if they weren’t? Would you wait? Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer or you just want to have control over renovations, maybe now is the time to buy.
Thinking of selling your home? Why not start preparing now to make your property show in the best light. Here are some tips: declutter, neutralize, clean, purify, define and enhance.
Solid Real Estate Market Performance in First Half of 2016
As the first national company to launch a website, the first to have streaming video and the first national company to offer buyer and seller guarantees…Coldwell Banker continues to lead the way.
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464 Shadow Creek Drive, Palos Heights, Illinois. Listed at $599,000.
Click play to view this home:
Five bedrooms total – two in finished basement! Absolutely beautiful home with a picturesque setting overlooking pond. This great property boasts a very open floor plan with a gourmet kitchen with granite, stainless steels appliances, hardwood floors, five bedrooms, five baths, including a master suite with Whirlpool and separate shower, dual furnace and air, wonderful finished basement with theatre, two bedrooms and bath. Stunning backyard with waterfall, paver patio and an in-ground pool to enjoy!
For more information, click here.
So you’ve been searching for that perfect house to call a ‘home’ and you finally found one! The price is right, and in such a competitive market you want to make sure you make a good offer so that you can guarantee your dream of making this house yours comes true! Freddie Mac covered “4 Tips for Making an Offer” in their latest Executive Perspective. Here are the 4 Tips they covered along with some additional information for your consideration:
1. Understand How Much You Can Afford
This ‘tip’ or ‘step’ really should take place before you start your home search process. As we’ve mentioned before, getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).
2. Act Fast
According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 4.7-month supply. This is well below the 6-month supply that is needed for a ‘normal’ market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream home. Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.
3. Make a Solid Offer
Freddie Mac offers this advice to help make your offer the strongest it can be:
Consider ways of making your offer stand out! Many buyers write a personal letter to the seller letting them know how much they would love to be the new homeowners. Your agent will be able to help you figure out if there are any other ways your offer could stand above the rest.
4. Be Prepared to Negotiate
If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home. If the inspection uncovers undisclosed problems or issues, you can typically re-negotiate the terms or cancel the contract.”
Whether buying your first home or your fifth, having a local real estate professional who is an expert in their market on your side is your best bet to make sure the process goes smoothly. Happy House Hunting!
| There is some thinking that the pace of the housing recovery is unsustainable and that we may be heading for another housing bubble. However, Jonathan Smoke, the Chief Economist of realtor.com explains the basic difference between 2005 and today:
If we look at the number of new single family housing starts over the last 30 years, we can see that the numbers of housing starts during the current recovery (2012-Today) are still way below historic averages, and are far less than the numbers built during the run-up to the housing bubble (2002-2006).
A single family housing start is defined as “the number of permits issued for construction of new single family housing units. Housing starts are an important economic indicator due to its extensive spill over benefits for the other sectors of the economy (retail, manufacturing, utilities).”
Current demand for housing actually calls for more new construction to be built – not less. We should at least return to historically normal levels.
Click play to view the Orland Park Real Estate Market Update for August 2016.
Looking to buy or sell real estate in Orland Park or the Chicago suburbs? Judy Glockler is consistently one of the top producing agents in the area. She and her team may be contacted via the contact form to the right.