March 10 is the date for the time change in US – Just a reminder to you in the northern states that Spring really is coming. 

Spring brings with it the season for home buying, and an opportunity to look at homebuying trends in 2019.  The face of homebuyers is shifting in the United States.  According to the National association of Hispanic Real Estate Professionals (NAHREP) homebuyers are increasingly younger, female and Hispanic.  Hispanics were the only demographic that increased its rate of homeownership for three consecutive years.  If you consider that 51% of the US population growth in 2017 was due to an increase in Hispanic population, it is easy to expect the expansion in US home sales is also Hispanic driven.   At a point where growth in US home sales has started to slow, we may depend on the continued increase in home sales led by millennials, females and Hispanic sectors of the population.

As Hispanic homebuying demand shapes the real estate market again in 2019, it may be a good time to look at best homebuying practices.

HUD.gov has a free “Homebuyers kit” that offers guides on federal home mortgage programs to help make homes affordable.  HUD offers low down payment loan options for those who have not been able to save a reasonable down payment.  Mortgage insurance payments are a part of HUD/FHA loan programs.  If you have saved at least 10% of your home sales price, you may be better served to buy a home using a traditional home mortgage program, which will drop the mortgage insurance payment once you have attained the required equity position.  If you are already struggling with your monthly payments, it is a good idea to get your debt in line before you buy a home. 

If you are a first time homebuyer, here some steps to follow to be ready for the 2019 home buying season:

Chart the Pros and Cons

Write or type your pros and cons list for buying vs. your current situation.  What do you hope to gain in your new home: space? Proximity to work? Better school district for your kids?  What do you stand to lose by buying a home now? Savings? Cash flow? Make sure you are thorough as you create your pros and cons chart.

Make your budget

Create a budget including everything you must pay monthly, and then add the things you pay for that are optional such as shopping, attending concerts, etc.  Now add in the new home mortgage, homeowner association fees if any, tax payment, home insurance payments.  Everything you are committed to spending each month (housing, insurance, utilities, loans and consumer credit) should not exceed forty five percent (45%) of your gross income.  Remember, you still need to spend on food and clothing etc.

Make your Homebuying Wish list

If you are looking to buy a different home, there are probably things about your old home that are a problem for you.  What do you want in your next home?  Make a list of the characteristics and amenities you want in a home, then  rearrange your list in order of priority of those characteristics.  Be sure to include location and community services if that is something you want in your next home. This prioritized list can become your next home shopping list.  

Check Home Prices in your Target Area

You can start your affordability check by looking online.  When you see homes with the same keywords as on your wish list, check the price of that home.  Don’t limit this search to homes currently for sale, but focus on home in the target home area with the same size and features as the home you want to buy.  Then look at that home’s most recent sale price.  If the sale was within the last six months, it is a good indicator of the price of homes still selling.  If the sale is older, its price may be outdated.  This search is a way to find a property that compares to the house you want, so you can have a ballpark idea of the price of your wish list home.

Get Pre-approved For a Homebuyer’s Mortgage

Pre-qualifying for a home mortgage, means telling the lender how much you earn, and your monthly expenses so the lender can see which loans fit your financial scenario.  Getting pre-approved means getting a credit check, providing income and funds availability information and then being issued a pre-approval based on verification of what you disclose in your loan application.  Unless the information you provide is incorrect, a pre-approval is more reliable than a pre-qualification.  It can tell you how much home you can afford to buy, and whether the lender will actually issue a mortgage to you.  Once you know your cap on home prices, compare how much you can spend to the prices you found when you checked home prices in your target area.  Do they match?  Great!  Happy home buying.  If you can buy more home than the prices your wish list brought, it is up to you whether you buy a higher priced home; but if the prices of your wish list properties exceed your preapproved home purchase price, then you will either need to revise your budget or wait and save more money.

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