BUYING A HOME IN 2022
Are you intent on buying a home in San Antonio, TX in 2022? It’s still a great time to get in the market, but you should be prepared. Sellers continue to have an upper hand, and buyers need to be ready to beat out the competition. If you’re getting ready to buy a home, here’s what you need to do now to set yourself up for success later this year.
Check your credit report
The first thing you should do when you’re thinking about buying a home in the near future is to order a copy of your credit report. Aim to do this anywhere from 6 – 12 months before you apply for a mortgage. This gives you ample time to check your report for errors and have them removed. It also allows you time to improve your credit score if it’s on the low side. Remember, the higher your credit score, the more likely you are to qualify for a mortgage and the better rate you will get.
Pay off debt
When determining your eligibility for a loan, lenders will look at your debt-to-income ratio (DTI). This is the percentage of your income that goes toward paying debts. Most lenders are looking for a DTI that is less than 43 percent. You may still qualify with a higher percentage, but you’ll need cash reserves ready or a really high credit score to compensate. If your DTI is more than 43 percent, work on paying off some of your debt before you apply for a loan.
Start saving cash for down payment
You’re going to need money for a down payment, and the more you can save the better. If you’re applying for a conventional loan, aim to have at least 20 percent of the purchase price ready to put down. If you’re hoping to qualify for a government-backed loan, like an FHA or VA loan, then you may need as little as three percent down (or in some cases none at all). But remember that if you don’t put down at least 20 percent, you’ll need to pay for private mortgage insurance (PMI). Also keep in mind closing costs when saving for your home purchase. These are commissions and fees paid when you close and are usually between 2 – 5 percent of the amount of the loan.
Know what you can afford
In today’s market, you need to know exactly how much house you can afford. This allows you to set your budget and refine your home search to those properties that only fall within your range. This will also help you know how much money you need to have saved for a down payment. Also keep in mind that you’ll have monthly maintenance costs that come with homeownership.
Shop around for a mortgage
Finally, it pays to shop around for a mortgage. Different lenders will offer different loan terms and rates. You could save yourself thousands of dollars over the life of the loan by shopping around. As with any large purchase, know your options so you can choose the best one for your specific needs.
To find a home in San Antonio TX, contact Melissa Muse Wiggans, Broker and Owner of Real Estate Muses. Her team of top San Antonio Realtors specialize in residential real estate for those buying and selling homes in San Antonio as well as military families and others moving or relocating to San Antonio, TX. Visit realestatemuses.com or call 210-485-9913 today.