Tips to Be Ready for the Homebuying Season

Tips to Be Ready for the Homebuying Season



Spring and summer are typically more active real estate seasons in the Upper Midwest. More homes come to the market, but more buyers are looking. Competition means you’ve got to be ready to move when the opportunity presents. Be prepared to find your dream home by taking these preparation steps ahead of time.


#1 - Reduce Your Debt

Work to lower your debt-to-income ratio. A low DTI will help you get the best interest rates and qualify for more lending opportunities. Not only will this make you a stronger buyer, but it’s an all-around good financial practice to carry as little debt as possible. 


If you’re not sure where to begin, try a debt snowball method. Start by paying off the smallest balance first. Once that is paid off, roll what you were paying into paying down the next lowest balance.


#2 - Know How Much Home You Can Afford

Before you start looking at homes on the market, interview a few mortgage lenders. Learn about their loan programs and the current interest rates. Not all lenders offer the same rate and terms.


Keep going from there. Your monthly bill will be more than principal and interest. Research local property taxes and home insurance. 


Factor in what you learn from the lenders regarding loan terms you pre-qualify for with insurance and tax information to figure out your monthly housing budget. That way, you’ll know your price bracket when looking at homes. You’ll buy something you can reasonably afford.

 

#3 - Make a List

Define your “must-haves” in a home. These are typically features like bedrooms, bathrooms, and square footage. Maybe you want something specific in a home, like a large backyard or a three-car garage. Write it down. 


Make a companion list of “wants,” things you’d like to have but could be compromised on. These could be features like a fireplace, an open floor plan, a wood floor, or an island in the kitchen. If you have a partner, make the list together so you both are on the same page. 

 

Factor in features outside of the home, like commute times, schools, and neighborhood amenities. These enhance the quality of life you’ll enjoy in the property. 


#4 - Talk With a Local Real Estate Agent

Local real estate agents will guide you to the right neighborhoods that fit your price range and amenities list. Spend more time looking at homes that meet your criteria and less time sorting through the MLS.


Go with your agent to open houses to get a better feel of what’s available in your price range. They will help you set realistic expectations. 


When you’re ready to buy, partner with a neighborhood specialist who can use their connections and knowledge to pinpoint the right homes.


#5 - Save Money

Median home prices have been trending upward for some time. As you begin to work through the home buying process, keep saving funds. Build up what you can offer a buyer, so you’ll present a stronger contract when it’s time to write an offer. You’ll also need funds for the closing costs and moving. 


#6 - Stay Focused

In a competitive market, it’s easy to get discouraged and start looking elsewhere or talk about stretching your budget. Stick to your guns and focus on the areas that are the best fit for you. Do everything you can to be ready to make an offer. You may not have the time to “sleep on it” if the home is the right one for you.


Leverage the higher inventory of the spring and summer season. With some patience and preparation, you’ll be ready to find your dream home. The Luminate team is here to help in any way we can.

Overcoming Housing Market Fears

By Luminate Marketing Team • 06 May, 2024
The recent headlines broadcasting mortgage rates surpassing the 7% mark have instilled a sense of apprehension among potential homebuyers. In a market perceived as increasingly unaffordable, it's easy to feel discouraged. However, with the right mortgage strategy, you can transform this challenging market into an opportunity.  Historical Perspective on Mortgage Rates While current rates hovering around 7% seem daunting, a historical review reveals a broader context. During the early 1980s, mortgage rates soared to 18% and even in more stable times, rates have frequently fluctuated above 10%. This historical perspective is vital because it demonstrates that while today’s rates are higher than in recent years, they remain within a historical long-term normal rate range.

Why Cash Buyers Dominate the 2024 Real Estate Market

By Luminate Marketing Team • 28 Apr, 2024
The 2024 real estate market is ROUGH. Losing to multiple offers, emotional frustration, and the stress from competing offers is discouraging to say the least. Notably 32% of home sales are being clinched by all-cash buyers, the strategic advantage of wielding cash has never been clearer. This resurgence in all-cash transactions underscores a market where immediacy and certainty reign supreme, especially as home prices continue their upward trajectory against a backdrop of scarce inventory. Within this context, it’s prudent to evaluate every option that can help you sell an existing home and get your offer accepted on a new home. Navigating the Alternatives iBuyers : These entities provide a quick, straightforward selling process for homeowners looking to bypass the traditional market. By making instant cash offers, iBuyers appeal to those seeking immediacy and convenience. However, this often comes at a cost, including service fees and potentially lower offer prices, as the iBuyer model is designed for speed over maximizing seller profits. Power Buyers : Power buyer programs cater to homeowners wishing to purchase their next home before selling their current one. They typically employ financial tools like bridge loans to facilitate this process, offering a solution to the timing mismatch between buying and selling. While this approach adds flexibility, it can also introduce complexity and additional costs into the transaction. But it's important to remember that not all of the innovative iBuyer and Power Buyer programs are the same. It's all about finding the right fit for your situation. Luminate's Unique Approach At Luminate Home Loans, we've carved out our own niche in the market. We offer a program that turns our clients into cash buyers. This isn't just a minor perk; it's a game-changer. Being a cash buyer makes your offer far more appealing to sellers, cutting through the delays that often come with loan approvals. Our approach is designed with you, the homeowner, in mind. We give you the immediate advantage of a cash offer, coupled with the flexibility to choose the best financing option for you down the line. It's about giving you control and confidence in your home-buying journey. If you're navigating the complexities of buying and selling homes, our program might just be the solution you've been searching for. We focus on ensuring our processes are straightforward, your personal information is secure, and the transition to your new home is as smooth as possible. With Luminate, you're not just moving houses. You're stepping into a well-thought-out system designed to get you into your dream home with ease and certainty. If this sounds like what you need, we're here to make it happen.

Understanding Economic Shifts: How Rising Fast Food Prices Intersect with the Housing Market

By Luminate Marketing Team • 21 Apr, 2024
Have you been noticing the prices of fast food and other products going up? Well, you're not alone. Across the country, families are feeling the financial pain of previously low-priced items suddenly costing double (or triple!) what they’re used to. For example, a lunch for two in California at a fast food chain can easily be $40 nowadays, which is a big jump for places that tout “cheap fast food.” But why exactly is this happening, and what does it have to do with you buying a home? Keep reading for more insights. Why Are Prices Going Up? Starting in April of 2024, the minimum wage for fast-food and healthcare facility employees in California was increased. As a result, their wages went from $16/hour to $20/hour in order to provide better wages and living conditions for these workers. This rise in minimum wage, while much needed for the economy, is happening all across the nation. And when businesses have to pay their employees more, they often raise their prices to cover the costs. Which, unfortunately, means the burger and fries you love might cost more now. What Does This Have to Do with Housing? In recent news, you may have heard of President Biden’s housing plan to help first-time homebuyers and to reduce housing costs. This plan would give money to first-time homebuyers and some families looking to sell their homes. But just like with the fast-food industry, the effects can vary. In some places like California, where not enough houses are available, making homes more affordable might not be enough. In other places, it might help a bit more. So, What's the Best Move for Homebuyers? If you're thinking about buying a home in the near future, it's good to know about these changes and plans. By staying informed and working with an expert lender, you can take advantage of any changes as soon as they happen. But even though extra money in the economy sounds great, it's important to look at the whole picture, like how many houses are available and how much they cost. If more homes become available and the costs of borrowing money for a home go down, this could be a better outcome for buyers vs money that is thrown into the economy. Conclusion Understanding these changes can help you make better, informed choices about your financial future. Whether you're saving up for a big purchase or just deciding where to grab lunch, let us help you save money where it counts! Reach out to us today so we can help you navigate your home-buying journey without having to skip out on the fries.
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