The year is off to a good start, and the market is moving ahead at full speed. If you're thinking about buying a house this year, now is the time to start planning ahead. Whether your goal is to make your move by spring or wait until fall, our real estate agents strongly recommend getting everything in order sooner rather than later. Most importantly, make sure you know what the lending landscape looks like for the year ahead so that you don't get caught off guard by last-minute surprises.
- Credit Counts
While lenders are eager to make loans, they continue to emphasize ensuring borrowers have credit scores that confirm their ability to repay the loan. As in years past, anything above around 670 is considered "Good" credit and will be sufficient to qualify for most loans. Of course, anything above 700, or between 750 and around 800, will qualify most borrowers for the best loan terms and options. And, while it's a badge of honor to achieve, striving to earn a score of between 800-850 is unlikely to be viewed by lenders any differently than a credit score in the same ballpark.
- Keep an Eye on Cash Reserves & Lending Requirements
It's a seller's market, which won't change anytime soon. Inventory is low, new construction is ham-stringed by kinked supply chains and labor shortages, and buyers are flush with cash after making hefty gains on their current or former houses. These factors are coming together to push prices even higher. And, while last year's dramatic increases are likely to slow down to around 5-6% this year, one thing is not going to change. Buyers are waving cash in front of sellers and making offers higher than appraised value. Lenders are leery of lending above appraised value, so you can expect that you will need to bring cash to the table to make up the difference between the appraisal and the price the seller will accept.
Further, whether you're a first-time buyer or an old hand, lenders are paying close attention to equity and income requirements. This means you'll want to pay off as much debt as possible, raise your income as high as possible, and keep your overall debt to income ratio as low as possible.
- Prices Will Rise
We expect prices to continue rising throughout the year. Thus, it isn't advantageous to put off a planned purchase to find a deal down the road. However, buying sooner rather than later will be the best bet in most home markets in the region.
- FHFA Loan Limits Rise
Prices are rising for homes across the country. Because of this, FHFA has increased borrowing limits for Fannie Mae and Freddie Mac to $647,200 for single-family homes. This is a significant increase from the $548,250 limit last year. Further, the limit for properties in high-cost areas was raised to $970,800. These increases will make it easier for borrowers to secure the mortgages they need to move into the homes they want.
We'd love to help you move into one of these Albany homes for sale. Contact us to learn more about the steps you can take today to help you move into the home you want tomorrow or six months from now.