Many Americans like having their own home, and it is still very much thought of as a part of the American dream. Nearly two-thirds of millennials and 45% of Gen Z say the desire to be a homeowner is why they buy a home. Many people choose homeownership because it is a part of our cultural mindset and economy. Today’s homebuyers are purchasing for many reasons:
- Low-interest rates
- More flexibility to work from home
- A lower house payment versus rent payment
- Fear of missing out (FOMO) on low-interest mortgage rate loans
While 2021 had the most robust housing market in 15 years, experts predict that 2022 will be different. 2021’s housing market experienced low inventory, high demand, and a risk-averse lending environment. The extreme spikes in home prices may be in the past as home prices normalize in 2022. If you desire to be a home buyer in 2022, here are a few tips to help turn your American Dream into a reality:
don’t panic
While the housing market is experiencing low inventory, high demand, and a risk-averse lending environment, don’t rush to buy and wait until the right home for you comes along.
prepare your finances
Understand the upper limits of your budget and don’t stretch your comfort level. A qualification number is the maximum price/payment amount that likely will increase once mortgage insurance, taxes, homeowners insurance, etc., are included.
mind your credit usage
Building your credit score will help you qualify for a lower interest rate on your mortgage. Limit your credit usage and pay off balances each month since your credit is pulled at qualification and 24-48 hours before closing and can occur numerous times. 4. Save for a larger down payment- The more cash you have available for a down payment, the better the interest rate will be on your loan. Putting down 20% can also help you avoid mortgage insurance which adds to your monthly payment. Also, you will need to be prepared to pay closing costs that are not included in your down payment.
Save for a larger down payment
The more cash you have available for a down payment, the better the interest rate will be on your loan. Putting down 20% can also help you avoid mortgage insurance which adds to your monthly payment. Also, you will need to be prepared to pay closing costs that are not included in your down payment.
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Questions? Your financial professional can help. Your financial professional can answer questions about saving for a down payment or using retirement savings assets for a down payment on a new mortgage.
