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It’s no secret that the housing market across the country is sizzling hot right now. And certain parts of the country are particularly hot, including parts though the Pacific Northwest in Washington State, Idaho, Oregon, and Colorado.
In fact, home prices have increased at double digit rates in many parts.
If you’re a first time home buyer, you’ll need to make sure you’re armed and prepared to get into the local market. This is especially true as home prices continue to increase. Luckily, there are some sound options for first time home buyers to adopt when purchasing real estate.
With a housing market this competitive, sometimes you have to think outside the box. If you’re having trouble finding your first home, here are a few things to consider.
Do you have a good idea of what your finances are like? Have you taken the time to look at all of your current expenses relative to your income? If not, it may be time to do so now before you start your search for a new home.
If you haven’t crunched the numbers, you may be underestimating what you can afford. And understanding what you are financially capable of spending on a home purchase is crucial.
You want to be able to comfortably manage your mortgage payments without becoming “house poor.” And you don’t want to waste your time looking at properties that are priced well above your price limit, which is where assessing your budget comes in handy.
A lender can help look at your finances and assess what you can borrow. This typically entails getting pre-approved for a mortgage.
Before you start house hunting, submit all pertinent documentation about your finances to your mortgage lender, who will use that information to assess your financial situation. Your credit score will also be looked at to determine your risk level as a borrower as well as how much you can get a loan for.
Condos make great starter homes. They’re typically much more affordable than a traditional single-family home, which first time home buyers will appreciate.
Since first timers don’t have any proceeds from a previous sale of a home to put towards the purchase of a new home, they’re essentially starting from scratch.
So, buying a much more affordable home can be a great way to ease into the real estate market without the need to have significant capital or get into a mortgage with a high loan-to-value ratio (LTV).
Condos can help you build equity to fuel a move up when you’re ready. Rather than sinking all your money into a more expensive home, a condo can be a stepping stone to a bigger home in the future after you’ve paid a little into your mortgage and allowed the property to appreciate in value, thereby helping you to build equity.
And when you eventually sell, you can use that equity and put it towards the purchase of a more expensive single-family home, if you so choose.
If you have a very specific neighbourhood that you are interested in buying a home in, consider the prices of homes in the area. It’s possible that the cost to buy in the neighbourhood may be far too high for you to afford.
Rather than being fixated on one specific area, consider widening your radius to include nearby neighbourhoods or communities can help you find a hidden gem. There are likely many other areas that are much more affordable and are not too far from your preferred neighbourhood. Keep an open mind about where to look for a home.
You just never know if you find another area that you may like even better. Your expert real estate agent will help you look in other communities that will suit you while fitting within your budget.
Not finding “the one”? Take another look at your desired features and see if any are nice-to-have instead of essential. As a home buyer, you’ll obviously want to find a home that checks off as many boxes as possible. But it’s important to differentiate between what you “want” and what you “need”.
For example, you might want a finished basement, but that might not necessarily be essential. On the other hand, you may need a third bedroom to accommodate a large family, which may be a feature you don’t want to compromise on.
Consider making two different lists: must-haves and essentials. That way if you find that the homes that have all your wants are way too expensive for you, you may find other properties with all of your essentials – but not necessarily all of your nice-to-haves – more within your price range.
Your first home is out there. There are plenty of options for first time home buyers. Let’s connect so you can stay up-to-date on all your options and and what other first time home buyers are doing to find their homes.
Do you have questions about mortgage rates this week and home loans? Or are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington, serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest and have been doing so since 1992. Contact us today with any questions you have about mortgages.
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.