Professional Help to Seek When Buying a House

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If you are buying a house in 2021, you are in for a rough ride because the market is tough. You must equip yourself with information so that your decisions are fully backed by data and grounded.

You will also need the help of professionals who are specialists in their fields. They have the experience and current knowledge to help you navigate the market and achieve your goal with your best interest in mind.

The State of the Housing Market

You must know that supply is low, prices are high, and you will be facing tough competition from other buyers. The good news is that mortgage rates are still down, but slowly moving up.

Data from Time and NextAdvisor show that the average 30-year fixed mortgage rate is at 3.05 percent as of May 14 after reaching a record low of 2.65 percent in January this year. CoreLogic chief economist Frank Nothaft says that this dip in mortgage rates is increasing the demand for housing. The gradual increasing trend is making buyers want to buy sooner than later.

There are not enough houses available for sale, though. Freddie Mac reports that the country has a shortage of four million homes vis-à-vis demand. The National Association of Realtors (NAR) states that the inventory of houses in the market decreased by 26 percent from January 2020 to January 2021. NAR senior economist and the director of housing and commercial research, Gay Cororaton, states that for the next three to five years there will be tight supply.

Following the law of economics, low supply and high demand automatically result in soaring prices. The S&P CoreLogic Case-Shiller U.S. national home price index shows that housing prices had the largest year-on-year surge in the last 15 years with an increase of 12 percent in February 2021 compared to the same time last year. According to real estate brokerage Redfin, buyers purchased 42 percent of homes in early April at higher than the listed price. The same phenomenon happened in April 2020 but at 16 percentage points less.

Determine What You Can Afford

You will need the help of a mortgage lending service to know how much you can borrow and how much you can afford to buy. First, you need to quantify your monthly expenses including all your current monthly debt payments. Then you need to find out your credit score online. The mortgage lender will use your income, expenses, and credit score to determine how much it will lend you.

Look around for options before settling on a mortgage lender. Compare the rates and loanable amount that each one can offer, along with other benefits.

Note that mortgage lenders require buyers to get a homeowners insurance policy to protect their investment in the property you will purchase. You must also shop around first for the best offer before choosing an insurance company. You must also factor in your monthly insurance payments along with your monthly mortgage payments in your budget.

Once you and the mortgage lender agree on the amount of your loan, ask for a pre-approval letter. You will need to show this to sellers to prove that you are ready to purchase.

House Hunting and Negotiations

house hunting

To look for a house that fits your needs and budget, and to help with negotiations with the seller, you will benefit from the services of an experienced and trustworthy real estate agent. Check online and ask for referrals from family and friends to ensure that you choose one who is a good fit.

The real estate agent will sort through available homes and show you those that fit your requirements. The agent can also represent you in dealing with the seller and advise you on how you can clinch the deal. Be honest with your real estate agent on how much cash you can afford on top of your loan so that both of you do not waste time in negotiations that are getting out of hand.

Many buyers in the highly competitive market now agree to purchasing with no contingency clauses that protect them in case the house inspection shows major damage or lower market value. You must weigh your decision carefully because the mortgage company will also lower your loan amount if the property market value turns out to be lower. You will also be spending much afterward if the house requires major repairs. Again, do due diligence in looking for the right certified home inspection service.

Moving into Your Dream House

Finally, when you have the keys to your dream house in hand, you will need the help of professional movers. You must also research their reliability and trustworthiness because they will be carrying your cherished belongings. Make sure to choose one with a track record of safety from theft and careful handling. Also, choose a service that will help you pack and unpack heavy items like large furniture and appliances.

Once you have settled in your new home, there are more services you will need, such as repair and maintenance for your heating, air conditioning and ventilation system, and other appliances. You may also need lawn services if you have a yard. Make sure you find out about these and other services in your new location.

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