Thinking of buying a new home in 2023?
First, the bad news. Affordability remains a serious challenge for most buyers realtor.com.
“Median house prices are 10% higher than they were a year ago, and mortgage rates are 100% higher than they were a year ago,” he said. Add an additional $800 to $1000 to your pre or monthly payment. “
Well, good news. With more inventory, there are more homes to choose from and less competition, he said. Also, the house will take a little longer to be on the market.
“It puts downward pressure on prices and offers buyers more bargaining power,” he said.
I wouldn’t say buyers will find bargains in 2023, but the shopping experience this year will be less frenetic and more methodical, Ratiu said. No. We are looking at a more ‘balanced’ market in 2023,” he said.
But you still need to do some preparatory work. Here is the checklist.
keep your financial house in order
“By eliminating as much outstanding debt as possible, you’ll be able to put more of your monthly income toward the cost of owning a home. ” atomis a leading provider of real estate and real estate data. “It will also improve your credit score and qualify you for the best interest rates on your mortgage.”
Lenders want mortgage, insurance, and tax payments to be no more than 28% to 33% of the borrower’s monthly income (although in high-cost states, this percentage often exceeds 40%). ), said Sharga.
“They also look at how much non-mortgage borrowers have to determine how much or if they will take out a loan.”
Get your funding right
Once you have an amount you can comfortably handle monthly payments and a sense of what you’re looking for (what you need/want in a home in terms of location, size, style, etc.), it’s time to get started. Mortgage lender shopping. Find someone to pre-approve your loan.
“This allows us to move forward faster when we find a property that interests us, giving us a competitive advantage over other prospects,” says Sharga. “Purchasing a loan generally helps secure better loan rates and terms than applying to a single lender.”
Calculate all costs
Do you know what these say about the cost of homeowners insurance, which is required on almost all mortgages?
“Wildfires in California, hurricanes in Florida, and other extreme weather events across the country have caused insurance premiums to skyrocket,” Sharga said.
Other costs that are often not considered, especially among first-time buyers, include property taxes and HOA fees, which can add hundreds of dollars to your monthly homeownership cost.
Also, “remember that inflation will continue for some time, so the cost of heating your home and buying furniture will still be high,” said founding partner Mitch Rochelle. macro trend advisor.
prepare to commit
For most buyers, a home is a long-term financial commitment, so make sure you’re happy with your job as well as the community you’re buying from.
“Make sure you’re safe and have enough money when you’re done. [buying] It saves the process, so if you lose your job, you don’t get stuck,” he said.
Also, make sure you plan to live in the home for at least 3-5 years, as there are transaction costs in the range of 4% or more of the cost of the home.
“A $500,000 house can be $25,000 in fees and miscellaneous costs.
Personal finance journalist Vera Gibbons is a former staff writer for SmartMoney magazine and a former correspondent for Kiplinger’s Personal Finance. Vera, who spent more than a decade as an on-air financial analyst for MSNBC, now co-hosts the weekly non-political news she founded podcast. No PoShe lives in Palm Beach, Florida.
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