Raise your hand if, like me, you have used scrolling through Zillow as a coping mechanism since about April of 2020.
Every time I’m on social media, I see yet another post from someone I know who is selling their house because they’ve realized they need more space or from someone who is excited to be BUYING a home because they need more space! No matter how you slice it, all the time at home over the last year has led to a super hot real estate market!
Those who are ready to buy their first home probably have a TON of questions since it’s such a huge decision already, plus the added craziness of buying during such unique times. We’ve teamed up with Summit Credit Union to bring some essential tips first time home buyers will want to know as they search for their first house.
Tips for First Time Home Buyers in 2021
from Summit Credit Union
After spending more time inside than ever in 2020, you might’ve finally made the decision: It’s time for my first house! But then comes a big question: How do I even get there? It may feel like you’re a long way from being ready to start your search, but don’t stress! With a little preparation and education, you’ll be stepping confidently out into your homebuying journey. And, before you know it, you’ll be standing next to a “sold” sign in front of your first home.
1. Learn about Current Mortgage Rates
The first step on the house hunt is taking a look at mortgage rates. You hear about them all the time, but what do you need to know about mortgage rates in 2021? Rates vary and fluctuate over time, and they’re especially low right now. This contributes to a Milwaukee-area market where we have far more buyers than sellers. With rates projected to stay relatively low for the remainder of the year, you can expect the competition for houses to keep heating up. But luckily, there are plenty of things you can do to get the ball rolling right away!
2. Get Preapproved for a Loan
With so many others looking for homes this year, you can get ahead of the game by getting preapproved. In the preapproval process, you’ll meet with your lender to review your credit history and your complete financial picture. Based on what they find, they’ll commit to giving you an exact loan amount for homes at or below a certain price level. This commitment gives you more power as a homebuyer, since sellers are more likely to accept an offer from a preapproved buyer than one without preapproval. Plus, many other buyers will have their preapproval paperwork ready to go—and you don’t want to fall behind by waiting until after you submit an offer to get approved! But, keep in mind that no matter how prepared you are, there’s a lot of competition. Patience is the name of the game. If you don’t get the first house you make an offer for, it’s ok! Stay prepared, stay positive.
3. Balance Your Dream Home with Your Must-Haves
As you look at houses for sale, it’s all about balance. When you hear “dream home,” you might paint a mental picture of a two-story house with granite countertops, a big yard and a pool. This does sound dreamy—but the question is whether it’s the best home to set your sights on right now. Before you search, make a list of all the things you absolutely need in your first home and separate them from the wish-fors. You’ll find this helps you decide what you value most and what you’d be able to go without in order to have it. Then, look at your list alongside the houses you’re seeing in your budget range. Which features are doable right now? Which might more be more attainable five years from now? It means a little give and take, but it’ll undoubtedly leave you happier with the place you end up calling home.
4. Have a Lender in Your Corner
No matter how much you learn and prepare to master the homebuying process, it’s always nice to have friends to help you along the way. Summit’s Mortgage Loan Officers can offer support during every step of the journey, from your first meeting through move-in day. Your Summit Mortgage Loan Officer will start the free preapproval process by breaking down your credit report and looking for ways you can get it to the right spot for your home search. You’ll take a look at your income and expenses and develop a plan for making a down payment and choosing the right type of mortgage for you. It might seem like a lot right now, but it’s worth it to get an edge on other buyers who aren’t approved yet.
Get Started on the Home-buying Process Now!
Getting educated on what it takes to buy a home can be fun, too! Summit’s Homebuyers After 5 events bring a community aspect to learning. In the monthly virtual events, Mortgage Loan Officers and realtors come together to help you learn about the homebuying process from every angle. In a live Q&A, you and other homebuyers will have a chance to ask any and all questions you have about buying your first home. You might even pick up some insight you weren’t expecting!
The home-buying process might feel daunting, but don’t worry! By getting educated, getting prepared, seeking guidance and homing in on exactly what you’re looking for, you’ll be well on your way to buying your first home in 2021. Let the house hunt begin!