Over the last year, we witnessed a dramatic housing boom that caused demand for homes to skyrocket and supply to rapidly deplete as buyers took advantage of record-low interest rates. Naturally, that boom has since slowed down to a less dramatic situation. Buyers now have to ask themselves: is now a good time to buy a house? Let’s take a look at some factors you might consider when making that decision in the ultra-competitive market that has characterized 2021 thus far.
Job stability matters a lot throughout the homebuying process. Have you worked at the same job for at least two years? If so, you can view that as an advantage when it comes to purchasing a new home. Sellers appreciate the reassurance that you have a steady stream of income, so be sure to have your last two years of W2s available to confirm that you are indeed ready to take on the responsibility of purchasing a home.
If you are considering purchasing a home in 2021, you most likely have been preparing for a few years now by putting funds aside for a down payment. In this competitive environment, you will greatly benefit yourself by having at least 20% saved to put toward the down payment of a home. Competitive offers are everything when inventory is so low! Luckily, a larger down payment upfront combined with today’s relatively low-interest rates will keep your monthly payment as low as possible.
If your savings will allow you to submit competitive offers this spring, the only other factor that could potentially hold you back is your credit score. Luckily, buyers usually only need a credit score of ~500 for FHA loan approval. If you plan to secure a conventional loan, you should work to boost your credit score to ~620 before seriously moving forward with your home purchase.
Clearview Realty helps home buyers in Colorado, Florida and California understand the different types of mortgages that are available and provides loans to help people achieve the dream of homeownership. Since the specifics of which mortgage to choose is dependent on a variety of factors, we encourage you to call us for more information and find out which is right for you. Our number is (720) 217-5731, or you can send us a message.