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As we approach the halfway point of 2021, it’s the perfect time to look back on the real estate goals or financial resolutions you set for yourself this year. Whether you had plans to buy, sell, invest, or refinance, the market has had an impact on all of these actions. Here’s an overview of the most common goals, and what you need to do during the second half of 2021 to achieve them.
If your goal is to buy
If you have real estate goals that involve buying a home this year, you will definitely need to prepare. This goal is going to be challenging to achieve in this market, but certainly not impossible! Here are some things you should do and consider before you start house hunting.
Get your pre-approval
One of the most important parts of buying a home is getting pre-approved for a mortgage. This gives lenders an idea of your finances so they can help you find the kind of mortgage you might qualify for, based on your current circumstances. Your pre-approval puts you ahead and makes it easier to get approved for a mortgage. It also helps you narrow down your budget.
Remember, your pre-approval doesn’t guarantee you a mortgage. You should keep your situation the same to increase your chances of securing a mortgage when it’s time to do so.
Set a budget
Of course, you also need to know how much you can afford to spend on a home. Your budget should include your down payment, mortgage payments, and closing costs. Also keep in mind how big your down payment should be, and whether your mortgage rates are likely to increase.
The price tag on a home isn’t the final amount — there are lots of costs associated with buying a home and you need to budget accordingly! Don’t buy over budget, but budget for your maximum amount and stick to it.
Find a realtor
Having a real estate agent is essential to buying a home! They help you find homes in your budget that meet your requirements, and take a lot of stress away from you in terms of contracts and paperwork. Sellers also tend to take buyers with agents more seriously because it shows they’re committed. If buying a home is one of your real estate goals, be sure to find a realtor as soon as possible!
If your goal is to sell
Are you thinking about selling your home this year? Since we’re in a seller’s market, your home is likely fairly valuable right now. You might be expecting to earn a lot of money on your home, but there are still some points to keep in mind.
Get an appraisal
In most cases, the agent you use to help sell your home will give you a rough estimate of your home’s value. If selling is one of your big real estate goals, it’s a good idea to get a proper appraisal to take in everything about the home and give it the most accurate value. This helps you and your agent decide on a listing price, and what you can expect for the home. People often need to know what they can sell for so they can plan for their future finances.
Complete any repairs
In order to get the most value out of your home, you should do any repairs that might take away from its selling price. This includes things like leaks, mold, rot, roofing, or plumbing issues. The cost to fix them will be less than the amount you might lose on a sale if you leave them as is. A home in better shape will also attract more buyers, so it will help you get the job done.
Remember your next steps
You can probably sell your home for a good amount of money, but remember, you have to think about where you’re going next. As great as it is to be a seller in this market, it often turns you into a buyer as well. When you’re buying a new home, you’ll have to think about all the considerations above, and make sure you have financing to purchase that new home without putting yourself in a situation where you can’t afford your monthly bills.
If your goal is to invest
If one of your real estate goals is to buy an investment property to rent out, this can be a great way to earn some passive income. However, every investment has risks as well as benefits. Here’s what you should plan for and expect as you embark on this buying journey.
Consider your finances
Even if you’re not buying this home to live in, you’re still buying a property. That means mortgage payments, utilities, a down payment, closing costs, and maintenance all fall on you as the owner. Do you have the funds to take care of a second property? This is an important question to ask yourself before you take the investment route.
Getting a mortgage for a rental property is often trickier than for a home you live in. If you already have a mortgage, this means you already have debt. Lenders will need extra proof you can handle a second mortgage and take on more debt. You also can’t rely on rent, as lenders want to know you can still make your payments even if the unit isn’t rented out at all times.
If your goal is to refinance
Finally, do your real estate goals have to do with refinancing your mortgage? Some people refinance to consolidate debt while others want to access home equity, but no matter what, you need to consider the following.
Can you get a lower rate?
Refinancing is a great option if you know you can secure a lower interest rate to save you money. You need to consider whether these savings are worth the penalties you might have to pay for breaking your terms. It’s up to you to decide how much you need to save to make this process worth it.
Consider your employment
When a lender provides a refinance, they need to have faith in your income and employment stability to protect themselves. It’s important to have a good credit score, solid income, and safe employment. Especially these days, the ability to prove yourself as a good candidate for a refinance is extra important.
No matter what, use a broker
No matter what your real estate goals are, it’s essential to use a broker to help you navigate the process. Brokers give you unbiased guidance about budgets, housing prices, interest rates, mortgage types, financing, and more. Most real estate goals are a little complex. Using a broker makes them easier!
If you have questions about your real estate goals, reach out today! Give us a call at Centum Home Lenders at 506-854-6847, or get in touch with us here.