When the only certainty is uncertainty, simple rules can help
Buying a home for the first time can be scary, but it’s especially true in today’s market. Rates are at a relative high and home sales are on the decline. Uncertainty remains around inflation. It’s understandable that you might be second-guessing yourself right about now.
While the current market conditions might actually provide a good opportunity to buy for some, no one can truly predict what will happen next. But no matter what shape the landscape takes, there are a few guiding principles for first-time homebuyers that hold up in any market conditions:
1. Get to know your finances first. Sounds obvious, but this goes beyond knowing total monthly expenses, credit score and even DTI. We’re talking about a true deep-dive into your overall financial profile. This level of analysis goes beyond knowing your total monthly expenses, credit score and DTI. You’ll also want to think about the less-tangible aspects of your life – what your desired lifestyle could cost in ten years, for example – and factor those into your budget, too.
2. You don’t have to put 20% down. This may come as a relief to buyers struggling to grow their savings amid record-high inflation. Explore your eligibility for an FHA loan, Fannie Mae’s HomeReady program and down payment assistance. Many home-financing solutions don’t require as large of a down payment, and some don’t require any at all.
3. Shop around for a mortgage. Sure, we may be a little biased given Morty’s marketplace model. But comparing quotes from multiple lenders is a smart choice for any buyer. As tempting as it is to go with the first lender your realtor suggests, don’t overlook the potential for more savings. Even fractions of a percentage point can add up to thousands over the life of your loan.
Be sure to check out some of the articles below for more tips and advice for first-time buyers.
– Robert Heck, Vice President of Mortgage @ Morty
Recommended reads for first-time buyers
In case you missed it…
- Is it really possible to buy a home with no money down? It is – and this article explains how.
- To understand what type of loan might best fit your situation, this explainer on common loan types can help.
- And if you’ve selected a loan option and are getting ready to apply, you’ll want these documents.