Six Reasons You Should Buy a Home in 2017
If you’re thinking about purchasing a home in 2017, you’re not the only one. Here’s why…
This is the perfect time of the year to “warm up” for the house hunt so that you can hit the ground running in 2017 as soon as you’re ready to buy your new home. Whether you’re looking in Southern Indiana or Western Kentucky, the prep work is relatively the same.
Check your Credit Score
A credit score is a numerical representation of your credit report. FICO scores range from 300 to 850, and the higher your score, the better. Typically, you’ll get the best interest rate on a loan if your score is 740 and above. A higher credit score should warrant you a lower mortgage rate. A lower rate, although it may only be one or two percent lower, can mean saving you thousands of dollars a year. If your credit score falls short, get busy repairing it!
Don’t Open New Credit Cards
Tempting as saving at checkout can be, opening new credit in 2017 may hurt your chances of getting a mortgage, or at least of getting the best rate on a loan. By opening a new credit card account, you’ve created a new line of credit. That credit line, and what is borrowed, can change the application numbers and jeopardize the application.
Keep Tabs on Interest Rates
If you hear that interest rates are at historic lows, or that interest rates are on the rise, you should not assume that you can get the rock-bottom rate in 2017. Not everyone gets the same interest rate on a mortgage loan. It depends on your financial picture and on the lender you choose. Closing costs can vary as well, although Jagoe Homes currently offers up to $2000 in closing costs with our new incentive based on using our approved lender, American Mortgage Services Company.
In the 1980’s, when mortgage rates hit 18% and seemed to rise every day, single-digit rates seemed like an impossible dream. Last August, however, rates on 30-year mortgages bottomed out at 3.55%. Now that the Federal Reserve finally decided to raise its key interest rate, mortgage rates have been climbing slowly. Today, the average rate is just above 4%; by 2019 or 2020, rates could easily climb to 6%. There is little, if not any doubt that this trend will continue.
When a lender gives your financials the once-over and preapproves you for a mortgage, you’ll be able to shows that you really can buy a new home. But how do you get preapproved? By preparing a few documents, which you can do several months in advance of the actual purchase. Here’s what you need to buy a new home:
- Tax Returns for the past two years
- W-2 forms for the past two years
- Paycheck stubs from the past few months
- Proof of mortgage or rent payments for the past year
- A list of all your debts, including credit cards, student loans, auto loans, and alimony
- A list of all your assets, including bank statements, auto titles, real estate, and any investment accounts
It is also advised that you not change jobs, make big purchases, or miss any debt payments as you prepare to acquire a mortgage.
Be Conscious of Diminishing Home Inventory
In November 2016, there were only 1.85 million homes for sale. That’s a nearly 10% drop from the year before. It continues a trend of steady decline since just before the housing crash, when inventory peaked. Real estate experts predict that inventory will continue to shrink in 2017, at least for the foreseeable future. That means that in most areas of the country, buyers have more homes to choose from today than they will next year. Every day that you wait to start building or purchasing your new home, you face stiffer competition for fewer homes.
Watch Rising Home & Homesite Prices
The bad news for buyers is that home prices now stand higher than before the 2007 crash, increasing 5% from 2015 to 2016. Housing experts predict an additional 2% to 3% jump in 2017. How high prices will rise and how long they’ll remain high is anyone’s guess. The good news? If you jump into the market pronto, you just might make it before those doors close.
Please visit our communities page to speak with a New Home Sales Consultant today to see what homes are available in your area