Buying a home is often one of the most prized goals that people set for themselves. As the housing market continues to improve over the last several years, the challenges associated with getting a home loan have increased.
It’s relatively more difficult to purchase a home now than it was even a year ago. This can be attributed to several factors. Mortgage banks have increased their standards and effectively lowered the number of people who can get a home loan.
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Moreover, unlike in years past, there is currently a shortage of available homes on the market for buyers to choose from. Some estimates have current inventory levels down 17 percent from 2012.
This means that even if you find a home that you really want to buy, you’ll likely be competing with more people in order to get it. Accordingly, it’s become increasingly helpful to have a good real estate agent who knows how to work around the competition.
If you happen to come across a home that you really like with a very steep price tag, then you can always make a lower offer and see if the seller accepts. Robert Irwin, who wrote the book “Buy Your First Home” says that some buyers are often willing to go up to 25 – 35 percent below the asking price. He also urges those looking for a home not to be concerned with insulting the homeowner with a lowball offer.
He writes, “I don’t think in this market any offer will insult the seller. Sellers are so anxious to get any kind of offer that they may counteroffer and begin negotiations.”
Doing research on the neighborhood that the home is in is always a good idea before making an offer. You can obtain this information by getting what is called a Comparative Market Analysis from your real estate broker.
These reports are typically around six months old and are thus never forward looking. So be sure to keep that in mind when you make an offer. If the housing market is recovering and home prices are increasing, then this should be accounted for in the offer. If, by contrast, the housing market is in freefall then your estimate should obviously reflect this.
Mortgage rates have either remained stagnant or have increased marginally over where they were in 2012. Not many housing experts are expecting them to fall below the record low levels that were seen just one year ago. And for that reason, now is really the best time to buy.
The main decision you’ll have to make with getting the home relates to what type of loan you want to take out – an adjustable rate or a fixed rate mortgage. This decision will depend on a variety of factors including living conditions, current wealth in liquid assets credit worthiness, etc.
If you are a homeowner in California, there are California mortgage lenders available at Directors Financial Group ready to assist you with your home purchase.
