Question of the Week
A Reference Guide for Homebuyers
2020 has been wild to say the least. In the midst of all of the chaos, people are finding a lot of opportunities as well. I’ve talked to a few clients this week looking to purchase, remodel, or refi their home. And, yes, now is a good time to do any of those things.
According to Bank Rate, the average 30-year fixed right now is 3.14%. You can definitely go lower than that if you get an ARM or a 15-year fixed. I spoke with a client this week that has a 2.65% fixed mortgage.
I put together a quick reference guide so homebuyers and homeowners can find all of the info they need in one place. Here is what you need to know:
- At the outset, you should figure out whether you are better off renting or owning in your situation.
- If you’ve determined that you want to own, you have to get your priorities in line: understand what you can afford, get pre-approval, and then look for a place.
- It will also benefit you to shore up your credit as much as you can, so you can get the best interest rates out there.
- Once you find a place, putting an offer in and getting it accepted are just the tip of the iceberg. You will have to jump through several hoops in order to close the deal.
- When you’re securing financing, again make sure you have the proper budget in mind and you understand how different circumstances can affect your interest rate.
- After you close, don’t forget about the extra costs that come with moving into a new place and how possible improvements will affect your taxes.
- Lastly, once you’re in your place, revisit your budget to take into account all the new expenses you may not have anticipated.
- If you’re thinking about refinancing, take a look at this calculator which will help you assess how much money you could save and the breakeven period, which represents the number of years you’ll have to make your new monthly payment before you recoup the costs of refinancing.
Those are the fundamentals. I have plenty of more posts regarding home owning so make sure to check out those posts as well in the archive. (Also tagged “real estate”.)
Quote of the Week
“In the middle of difficulty lies opportunity.” – Albert Einstein
Task of the Week
If you’re in a position to take advantage of these low interest rates, start assessing where you are in the process with the links above and start gathering info that you may need for pre-approval. That will likely include:
- Tax returns and income documents for 2018 and 2019
- Checking and Savings account statements for the last 60 days
- Pay stubs inclusive of the past 30 days
- Profit and Loss for 2020 if you own a business
- IRA and 401k/403b quarterly statements