Along with the New Year come the new trends.
The same goes for those occurring in the housing industry. Here are seven bits of advice and news that can help first-time home buyers navigate the mortgage industry in 2013.
Save money now.
Lenders will be paying more attention to the sum of money in your bank account in 2013. They want borrowers who have more cash than what is just enough to cover the down payment and closing cost of a home. Not having enough cash stocked up might make you a deal-breaker of a loan candidate for a lender.
Trust that it is not a favorable market for buyers.
Before, news about struggling real estate was common, but in the coming year that won’t be the case. The housing industry is now at the beginning of a period of recovery, and people are seeing home values gradually rising. This situation obviously favors sellers, so expect to have a lot more competition when trying to take out a mortgage loan.
Research on your local market.
What may be true for another area might not be the case for yours. It is always a good idea to do your own research. Though it is best to gather information on your own, you can use real estate agents as a sort of stepping stone in the right direction.
Get used to strict lender screenings.
Gone are the days of easy loan qualification. From now on, lenders will question your background more thoroughly. You have no choice but to comply, since the screenings will play an essential step with getting your home loan approved. Click here to Apply for Loan from PrimeLending.
Get all your documents in order.
Strict screenings mean a ton of documentation. It’s good to arrange them beforehand to make the process less of a headache. Expect to submit, among other documents, tax returns, w2’s and bank statements. Your lender will give you a complete list when you apply for a loan. Click here to Ask an Expert.
Look out for qualified mortgages (QM).
Qualified mortgage applies to a new set of rules about the mortgage loan process that have been passed through an act by Congress. These rules will stipulate exactly what needs to happen throughout the mortgage loan process.
Watch out for rising FHA loan insurance.
Finally, mortgage insurance premiums (MIP) on FHA loans are now set to rise April 2013 – an important piece of information to know, since FHA loans are popular for first-time home buyers. The reason for this is that you can make smaller down payments than usual when using an FHA loan.