If you’ve been considering purchasing a home recently, now may be the ideal time to take that step, particularly if you’re a first time home buyer! The housing market landscape has made some improvements over the past few years, and, with a little strategizing, buyers have the opportunity to land the home they’ve been dreaming of at a great rate. Read on to gain some key insights and tips for buying your first home in Wilmington NC!
First thing’s first: we’re sure you’re familiar with the saying, but before buying a house, you have to first determine “how much house” you can afford, which is why we recommend getting pre-approved for a home loan before the search begins. The housing market trend thus far has been pretty bright for home buyers in recent years. Mortgage rates are remaining low, right around 3 to 4 percent, though they are expected to rise to an approximate 4.65 percent by the end of the year, so the sooner you can get your ducks in a row, the better!
When looking for your mortgage, make sure to consider all of your options, which may or may not be the typical 30-year, fixed-rate mortgage. Learn more about the various loan options that are available. Investigate what your local banks have to offer! The City of Wilmington actually partners with local banks in its Home Ownership Pool (HOP) in an attempt to provide long-term housing to people with steady income, but generally modest means. There are some requirements, but also some enticing perks!
We also suggest that buyers check out our preferred lender, TowneBank Mortgage, if you’re looking for a place to start your mortgage search. No matter which lender you go with, make sure to check out options from at least three different lenders to secure financing that best suits your needs.
Start formulating your ideal home buying/moving scenario. If you’re a first time homebuyer, the process of transitioning into your new home should be fairly simple. You might have to break your lease early, but you’re not burdened with the task of selling or renting your current home. Go ahead and plan for this step now. Contact your landlord to find out the stipulations of breaking your lease. If you’re moving from out of state, or from out of town, familiarize yourself with living costs in your soon-to-be hometown. If you don’t already have a job lined up, start looking. Plan trips to get acquainted with the area and your ideal neighborhood. There are a wide variety of houses for sale in Wilmington NC to choose from, in different neighborhoods with different amenities. Learn where you’ll fit in best.
Additionally, if you’ve already gotten pre-approved for a home loan, that’s great! But you also need to factor in closing costs and fees to get an accurate idea of how much money you’re really working with. You can get a general snapshot of what to expect here, referring to a closing costs calculator for an estimate, or by contacting a REALTOR® to help guide you through the home buying process and the fees that you can expect to incur.
Cut to the Chase
Negotiating the cost on a home isn’t your typical Craigslist haggle. While negotiating is not uncommon or out-of-the-question, home sellers generally prefer that you put your best offer first. If you try to lowball the seller, there’s a chance that they may not give you an opportunity to bid again. If you want to leave a little wiggle room, you can include an escalator clause in your offer to increase your bid a certain amount over a competitor’s, but here, again, it’s generally best to just put your best foot forward.
We recommend that buyers protect their offer with contingencies, such as a financing/mortgage contingency to allow yourself time to close on your loan or ensure that you receive approval on your loan amount (this is where getting pre-approved can help to speed things up). Other important contingencies include a home inspection contingency and an appraisal contingency to secure a fair price for the house, as well as safeguard against a home with damage or need for repairs.
Prepare for Change
“The best-laid plans of mice and men, often go awry.” Not to hit you with another common saying, but this one really holds some water here! Be prepared for change. Be prepared to go back to the drawing board and forge a new plan. Or, better yet, have backup plans in place!
Figure out what your next course of action will be if your initial financing falls through, or your offer on your “dream” home doesn’t take. Or, it could be that multiple visits to your prospective new home reveal flaws or loud neighbors or bad traffic, and you need to go back to shopping around. What will you do if your movers cancel? What will you do if your move is held up by your buyer’s need to move out of the house first? What will you do if closing is delayed and you have to reschedule your original move? Whatever the scenario, be ready to change your plans and move in the best direction for your goals, financing and future. This is a long-term investment; there’s no benefit to rushing and getting yourself into a home that isn’t right for you.
This year, due to new regulations in mortgage lending that went into effect in October of 2015, closings have experienced some delays. In most cases, delays are relatively minor, taking an approximate three to eight additional days. In other cases, delays took up to 20 days. These new regulations, referred to as TRID, (TILA–RESPA Integrated Disclosure) are designed to benefit you, as the buyer, in clarifying total costs and generally ensuring fewer errors in the closing process. However, as with any change to a complex system, the change isn’t making the smoothest of transitions. There’s really nothing that buyers can due to curtail these details, but it’s important to know that your closing might be affected and plan accordingly.
Furthermore, if you are: self-employed, recently jobless, will be changing jobs in the move, or have commission-based income, you may also experience delays or challenges in receiving financing and closing on a mortgage. Don’t be discouraged! Just realize that financing might be more difficult to lock down right away or, especially if you are recently jobless, you may have to shelf your plans for purchasing a new home temporarily, until your income is more definite again.
Sure, you can try to navigate these waters on your own, but, especially if you are first time homebuyer, you’ll find that no asset is greater throughout the home buying process than having a REALTOR® by your side to guide you. The time for locking down a great mortgage is prime, yes, but the housing market in Wilmington NC is competitive. The demand for homes exceeds the supply, so buyers need to be on their A-game to land the home they’ve been dreaming of at a price they can afford. If you’re serious about buying a house, then you need to be serious about your process to do so. Join forces with a real estate agent!
If you’re a first time homebuyer, or even if you’re more seasoned, Intracoastal Realty is here to answer your questions and be your local resource to acquiring a home in Wilmington NC. Looking to sell your home? We can help with that too. Contact us today!