Buying a home can be difficult under all circumstances. But in today’s real estate market, it can be even more difficult.
Buyers these days are struggling with inflated home prices and limited housing stock. And if you’re new to the process, it’s easy to get overwhelmed.
But fear not. Christian Wallace, Head of Real Estate Services at Better, is here with some expert advice for home buyers. Here are three great tips he wants to share.
6 simple tips to get a 1.75% mortgage rate
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1. Know your credit score – and what options it is buying from you
Your credit score indicates how trustworthy you are as a borrower and can help mortgage lenders decide whether or not you qualify for a home loan. It can also help you determine the interest rate you qualify for on your mortgage. (The lower your interest rate, the less your mortgage will cost you.)
Most mortgage lenders require a minimum score of 620 to qualify for a conventional loan. Some lenders, however, may have higher standards.
Wallace suggests shopping around with several lenders to see how your credit score is doing. If you find yourself being turned down for a mortgage or denied a competitive rate, it’s worth working to raise your score. You can do this by paying incoming bills on time, paying off certain credit cards you have accumulated a balance on, and correcting errors on your credit report.
2. Keep your debt to a minimum
While your credit rating is certainly a big factor, your debt-to-income ratio (DTI) can play an even bigger role in your ability to buy a home. Your DTI measures how much of your income goes to debt, and too high a ratio could be a sign that you are overloaded. In fact, as Wallace puts it, “a high DTI is the number one reason mortgage applications get turned down.”
If your DTI is too high, try to pay off some existing loans if possible. And avoid taking on new debt until you’ve taken out a mortgage. If you can’t reduce or minimize your debt, tackle a higher DTI from the opposite angle – try increasing your income through a second job.
3. Look for a one stop mortgage lender
Getting a mortgage is just one step you will need to take on your path to home ownership. You’ll also need to find a real estate agent to help you find the right home, and then you’ll need home insurance to make sure you’re covered for property damage.
Many buyers look for these services separately. But a good way to streamline the process is to find a single source for everyone. And in this regard, Better can help.
As Wallace explains, âBetter started out purely as a mortgage lender and expanded into other lines of business – real estate, home insurance, title insurance and closing services – after listening to the confusion of. our customers about these products and processes. “
Better now serves as a one-stop-shop for home buyers. In fact, Better Real Estate currently has around 150 active agents in 14 states, and the goal is to hire 500 agents in 20 states by the end of the year.
Not only does using a full service like Better save buyers time, it can also save them money. âOur commission-free mortgages save clients an average of $ 8,000 over the life of the loan,â Wallace said. “And Better Real Estate customers who use Better Mortgage save $ 2,000 on closing costs plus a 1% discount.”
Owning a home can provide greater financial stability. If you are looking for a home, it pays to follow these helpful tips. They could be the difference between a smooth buying process and a frustrating one.