Breaking into the home-buying market can seem daunting. With rising housing prices and competitive markets across the country, it’s hard to know when to buy a house.
There are many reasons now is the right time to buy, from low interest rates to long-term investment advantages. Whether you’re looking to purchase your first home or you’re searching for an upgrade, our excellent team of lending professionals at Bison State Bank is dedicated to helping you find the right home for you at the right price.
For more on when to buy a house, read on for our Home Buyer’s Survival Guide.
2021 Home Buyer’s Survival Guide
There are lots of advantages to purchasing and owning your home, like the freedom of having your own space that you can mold to your unique tastes. With this list of helpful hints from our mortgage lending experts at Bison State Bank, you should feel confident wading into the waters of home buying, regardless of the market.
How to start the home buying process
The hardest part of any difficult journey is the first step, and the same goes for home buying. Before contacting lenders and realtors, start looking around for available homes in your area that fit your needs. Getting a good understanding of the home market in your area will give you a baseline of what homes are available and their listing prices.
Now is a good time to find your right house at the right price, but more importantly, it’s a good time to lock in a low lending rate. Our rates at Bison State Bank routinely beat the national average, and we ensure that the rates we provide are right for each of our clients.
To see the difference our approach of honesty, integrity, and experience makes, get a mortgage rate quote and be better informed about when to buy a house.
Find a good realtor
It’s crucial to have the right support when starting the home buying process. Finding a qualified and trustworthy realtor is a key step in the early stages of home buying. You might not be an expert on finding the best neighborhoods to search in or the latest housing market trends, but your realtor should be!
Your realtor is your eyes and ears on the ground, finding the right situation to meet your unique needs. They know the area, the right contractors to get jobs done, and they can help guide you toward the right investment.
Shop for the best options
When you’re ready to jump feet first into the housing market, don’t just settle for the first options presented. It’s always best to have multiple options, both in the choice of your new home and in your mortgage lender.
Keep in mind that housing prices and mortgage rates aren’t the only factors to consider when shopping around. Some online mortgage lenders will fit your loan into a cookie-cutter, one-size-fits-all mortgage.
At Bison State Bank, our seasoned loan officers can match you with the right loan, not just the best rate. We are solely focused on building relationships with our clients, sacrificing short-term profits on our end for long-term satisfaction that has clients returning to work with us years down the road.
Get everything in order
Before putting an offer in on a house, find out what exactly you will need to complete the home buying process. Talk with your lender and your realtor about the different forms you will have to send over for your mortgage.
One of the biggest critiques we see during the home buying process is loan officers asking for materials late in the process. Sometimes that’s unavoidable, but the best way to keep the home buying process smooth and efficient is to be prepared for everything that will occur. Documents you might need during the mortgage application process include:
- Pay stubs from the last 30 days
- W-2s from current and past employers
- Income tax returns
- Alimony or child support
- Bank statements from past two or three months
- Retirement and investment account statements
- Proof of rent payments over last 12 months
- Government-issued identification
- And more
This also includes building up your savings for closing costs. Talk with your realtor or your lender to figure out how much you will need on closing day, or use our home closing cost calculator for an estimate.
Offering, Inspection and Appraisal
You’ve found the perfect home that fits your budget and your style. Now you’re ready to put down an offer. Here’s what to expect, and what you need to know before having your realtor put together the paperwork.
Setting the right offer
When you’ve found the place you want to put an offer on, it’s important to act quickly. According to a 2021 study by Zillow, nearly half of homes in the U.S. sell in less than a week after going on the market.
That doesn’t mean you need to rush your decision, it just means you need to be ready when the time comes to put in an offer. Talk with your realtor about what the right offer should be, whether you should include any buyer concessions, or any other factors that might make your offer stand out above the rest.
It’s also important to get your lender locked in and talk about pre-qualification.
What is pre-qualification?
Simply put, a pre-qualification from a lender lets you and your realtor know up-front where to focus your home search. It means your lender has done a preliminary check of your finances and credit, giving you a picture of exactly how much you can afford.
A pre-qualification from the trusted online mortgage lenders at Bison State Bank can set your home offer apart from the rest. Sellers and real estate agents can rest assured that your offer is backed by a team of professional loan officers with a proven track record.
Once your offer is accepted, it’s now time to schedule your new home’s inspection. Depending on the conditions of your offer, either the buyer or the seller will pay for the home inspection.
Unfortunately, many people don’t put in as much research into buying a home as they do other big investments, like buying a car. You want to know if the engine is running properly and that the A/C works before driving your car off the lot, and the same applies when buying a home.
Remember, the average length of a home mortgage in the US is 30 years. This is a long-term investment, so it’s important to schedule an inspection and make sure there are no surprises after closing day.
Ask your realtor for trusted inspectors who have a variety of experience in home work. The inspector will thoroughly examine your home and find any issues that could hold up the final sale.
Though the concept is the same, a home appraisal is different from a home inspection. After your inspection, your lender will schedule an appraiser to come and examine the home you are trying to buy.
The appraiser creates a report based off of their visual inspection, as well as recent sales of similar homes in the area, current market trends, and other aspects of the home (i.e. hardwood floors, pools, sheds, floor plan, square footage).
If an appraisal value is lower than the offer on the home, negotiations between both parties can take place or certain concessions can take into effect. This can cause a delay in closing, or even an outright cancellation.
The borrower typically pays appraisal fees, as they are added into closing costs.
Closing on your new home
The last step in the home buying process is closing. With the finish line in sight, this can also be the most stressful part of the journey. Here are a few tips for reducing stress in the weeks leading to closing:
- Don’t take on new debt
- Don’t pay off existing debt unless part of closing agreement
- Don’t change jobs
- Don’t switch banks
Stability is the key when it comes to the final stretch leading to closing. Even paying off debt, if you’re doing that at the wrong time, can cause a ripple effect that could lead to a delay or cancellation of the offer. Paying off debt is great, but it is more ideal if you can wait until after your closing date.
The reason you want your finances as stable as possible is so underwriters for your mortgage have a clear picture of your financial situation and can accurately approve, or deny, your loan. At Bison State Bank, our underwriting team is in-house and can communicate with your lender efficiently, but you still want to avoid spooking your underwriter with any sudden changes in your finances.
A big part of that stability is having a good nest egg stashed away in savings. Underwriters like seeing substantial savings (ideally 3-6 months worth of mortgage payments) stowed away, untouched in your accounts.
The main goal of our closing team at Bison State Bank is to get your house closed as smoothly and stress-free as possible. If the loan hasn’t been approved for closing yet, we can still get you a final number so you can feel confident about your situation ahead of the actual closing date.
We find people feel easier knowing what their final number is and where their final documents are. We take care of the money part ahead of time, so when it comes to closing day you just need to sign a few documents and receive the keys to your new home.
Survival guide checklist
Here is a quick recap of what you need to keep in mind while trying to determine when to buy a house:
Before submitting an offer
- Get an idea of the housing market in the area you would like to live
- Find a trusted real estate agent to guide you through the process
- Apply for a pre-approved loan from a trusted mortgage lender
- Shop around for the best rates that fit your financial situation
- Get all of the documents needed for your loan together before submitting an offer
Offering, inspection and appraisal
- When submitting your offer, discuss with your realtor the best way to make your offer stand out
- After your offer is accepted, schedule an inspection with a quality inspector
- Have the home appraised by an unbiased appraiser
- Remain financially stable throughout the closing process
- Keep in communication with your lender and realtor to make sure everything is in order for closing day
Bison State Bank: Your guide through the home buying journey
Buying a home is arguably the biggest financial decision of your life. It can be frightening to begin that process alone.
Our team of experienced online mortgage professionals at Bison State Bank is passionate about not only helping clients to closing day, but making them feel comfortable with their financial futures.
Unlike other online mortgage lenders, our loan officers won’t try to fit you into a loan that’s not right for your situation. We are seasoned professionals in this industry with the experience to fit each client with a tailored loan solution that will leave them satisfied with their purchase and confident in their decisions.
Contact us today to see the difference our honesty, integrity, and experience makes when it comes to finding you the right loan for when you’re ready to buy a house.