Work with a professional, REALTOR.

Buying a house is a minefield full of “I didn’t know that.” From choosing the right home to qualifying for the best mortgage, you want to minimize the things you don’t know.  So let’s lower your “didn’t-know” ratio. With a shifting lending landscape, unpredictable interest rates and down payment priorities based on your local market, here’s what you’ll need to know about buying a home this year.

What’s the first step to buying a house?

With acute shortages of homes for sale in so many markets throughout Brunswick County, getting a pre-approval for a loan is more important than ever. Cash buyers used to give sellers confidence that a deal would close quickly, but fewer cash buyers are shopping right now. And when houses weren’t in such short supply, buyers didn’t face the pressures of intense markets.

With a lender lined up and a pre-approval letter in your pocket, Sellers know you’re serious.  With a pre-approval, Sellers feel comfortable that, hey, this guy is working with a REALTOR and is a legit person who is going to buy and close and not just a tire-kicker.

Prospective buyers need to immediately start with the lender.  See what you can afford and see what your hurdles are going to be.”  Shopping for homes before gaining a loan pre-approval is a big home buyer mistake.  Some buyers don’t realize how many underwriting deal breakers there are that can hijack or significantly delay getting a mortgage.

Those loan approval pitfalls can include issues with student loans, significant recent cash deposits, and the manner in which self employment income is reported.

What credit score is needed to buy a house?

A credit score of 620 is typically the minimum that mortgage lenders are looking for, though some lenders will go as low as 580 or below.  What I would consider is average credit is 620 to 680, Very good credit is 680 to 740, and if you’re over 740, you’re spotless.”

How much house can I afford is the first-time home buyer question is asked most often. We offer a rule-of-thumb to help. Instead of telling you about debt-to-income ratio, first-time buyers need to consider three times their income as a starting point.

So, if you and your spouse have a combined annual income of $110,000, most likely $330,000 is your price range, plus or minus a couple of percent. But rather than guessing, you can simply take the first step — talking to a lender. That’s why you get the mortgage first.

What’s happening with interest rates?

Another change impacting the real estate market is interest rate volatility. Many experts predicted rates to remain steady, yet so far 30-year mortgage aren’t not far from where they were a year ago. At this point, it’s not clear where they’re headed over the next 12 months, it’s definitely a concern for prospective buyers who are thinking, “let’s do this sooner rather than later.”

In fact, more than a third of Americans say they plan to buy within the next five years — and nearly one-fourth of those prospective buyers say they’ll buy in the next 12 months, according to NerdWallet’s.