Mortgage rates in the United States remain low, and this is believed to carry on for the most part of 2021 with the pandemic still ongoing. With such a situation, now is the good time to buy a home. However, getting a mortgage to buy a new home is easier said than done, and requires you to pay close attention to some important aspects.
Some of the challenges that prospect homebuyers might encounter in 2021 are:
- Higher credit score requirements
- Slowing down or pausing of mortgage issuances by some lenders
- Bigger down payment
- Home sellers taking their property off the market
Fortunately, buying a great property this year is still possible if you know what to look for and what you should avoid.
Choose a Practical Type of Loan
For example, an adjustable-rate mortgage works well for you if you are planning to move to another home in less than 10 years. If you are looking into staying for a long time, a fixed rate is a more practical bet. Then, you also have the options of going for jumbo loans, 203K rehab loans or Veterans Affairs home loans. Choosing the type of loan can be overwhelming, so you might want to consider simplifying the process by working with a mortgage expert like Greg Hayden of Mortgages Done Right.
The most popular tip for first-time home buyers is to get preapproved. Once you get preapproved, you will know how much money you get to borrow. This will give you the means to shop for the properties that your budget can afford. You might even be eligible to borrow as much as three times your gross annual income. The process of getting preapproved is easier than you think. All you have to do is contact your loan officer or mortgage provider to get started.
Fix Your Credit Store
The interest rate that applies to your loan depends on your credit score, whether you are buying a house for the first time or are an existing homeowner. Applicants with more than 750 credit scores are more likely to get the best mortgage rates. For those with 700 to 750 credit scores, you can still expect to get good deals. For 700 and below, expect to get less than desired rate or you are more likely to pay higher down payment.
Pick the Right Lender
There is much more to choosing a mortgage provider than just going for the ones with the lowest interest rates. Sometimes, the fees you have to pay throughout the course of the loan may outweigh the interest rate advantages you think you have. A lender’s flexibility when it comes to repayment frequency and making advance payments are some of the things that should also be considered when picking a lender. The lender’s reputation and its customer service levels also play a vital role in making an educated decision.
These are just a few of the many useful tips when buying a new home in 2021. If you keep these in mind, consider yourself to be a step closer into becoming a new homeowner. Fortunately, there are mortgage experts like Greg Hayden who can provide you with professional assistance to help find the right home loan for your homeowning goals.