You know those things in life that feel sort of insurmountable and impossible to begin? For my partner, it’s putting his socks away. For me, it’s doing my taxes, or going for runs when it’s anywhere above 60 degrees (this Washington State girl needs her cool, mild climates!).
And there are larger tasks that can feel difficult as well–finally tackling that home improvement project, perhaps, or selling or buying a home. Fortunately, when it comes to buying a home, Pickett Street has already done all the work to help you get organized and get started.
This week, Pickett Street held another class for home buyers. If you missed it, not to worry–Pickett Street holds this class regularly, and the next one will be June 12. Also, for more information about this class or about buying or selling a home, get in touch with the team at info@pickettstreet.com or (425) 502-5397. To further help you, here are the eight steps to buying a home.
1. Decide to buy.
Would buying a home would be a smart, positive step in your life right now? Here are a few bits of data to help you make this decision:
- It is now more expensive than ever to rent. Historically, renters needed about 25.8% of their income to pay for rent. Today, they need about 29.2%. Compare these numbers to home buyers: while historically, buyers needed to set aside about 21.0% of their income to afford the median home, today they only need to set aside about 15.8%.
- Mortgage rates are still fairly low at 4.51%. But, by 2019, the 30-year fixed mortgage rate is predicted to fall between 5.15% and 5.50%. By 2020, the rate is predicted to be as high as 6.50%. Moral of the story, it’s smart to buy now.
- As Pickett Street talks about in their home buyer class, with each quarter of a percent increase in interest rates, the value of the home you can afford decreases by 2.5% (in this example $10,000).
There, you’ve done it. You’ve just decided to buy a home. Cross this item off your list and celebrate.
2. Secure financing.
First, get in touch with Pickett Street’s preferred mortgage lender Cody Touchette at 206-909-2007. Also, here are Cody’s house buying hacks.
Second, there are three different loan options to keep in mind:
- Conventional loans.
- FHA loans.
- $0 down options (state bonds, USDA loans, or VA loans).
We’ll talk about the the advantages and disadvantages to each of these loans in a blog post next month. For now, just be sure to talk to Pickett Street and Cody Touchette about which loan might be best for you.
Third, Pickett Street recommends that you follow these tips when securing financing for a home:
- Save pay stubs.
- Save bank statements, complete with all pages.
- Keep copies of all documents submitted to processing.
- Continue to pay all of your debts and loans on time.
And finally, here are a few things to avoid:
- Making cash deposits.
- Charging large purchases to your credit card.
- Co-signing a loan for anyone.
- Changing bank accounts.
- Applying for new credit cards.
- Changing jobs/employers without checking in with your lender.
3. Choose your agent.
Last week, we wrote about the importance of choosing the right real estate agent. Contact Pickett Street (info@pickettstreet.com or (425) 502-5397) to find the best person to talk to you about securing financing and buying a home.
If you’re looking for more reading material, check out our spring house hunting tips and our blog that dispels three common home buyer fears.