It’s an interesting time to be buying a home as markets across the country continue to experience historically low inventory and high demand. While the competition has been intense for buyers, there are signs that the real estate market could be cooling down as existing home sales continue to fall due to rising interest rates and other factors.
Before jumping in, prospective buyers should educate themselves on the process. Beyond the search, buyers need to think about financing, prequalification and closing costs to be in the best position to move quickly on the home of their dreams.
If you’re one of the many Americans in the market for a home, completing these three steps will help increase your chances of having an offer accepted.
Get Prequalified for a Mortgage
Getting prequalified for a mortgage is an essential first step in the homebuying process. It gives you an idea of how much money you can borrow, which will guide your search for a home. It also shows sellers that you’re creditworthy and serious about purchasing the home. Lastly, being prequalified expedites your timeline for receiving a loan, which is enticing for a seller who has multiple interested buyers.
Take Inventory of Your Upfront Costs
The next step in the homebuying process is to take inventory of the upfront costs, which is often one of the main challenges for homebuyers.
While there is no way to avoid a down payment, there are loan options available that require as little as 3% of the purchase price as a down payment for eligible homebuyers
There are also many location-based and lender-backed financial resources available to help level the playing field and assist with upfront costs. Chase offers Homebuyer grants up to $5000 that can be used toward a down payment and/or closing costs in eligible neighborhoods across the country. Qualified buyers can earn an additional $500 by getting a DreaMaker mortgage and completing a certified homebuyer education course.
Consult a Home Lending Advisor
It’s also a good idea to consult a home lending advisor to walk you through some of the more complex details of homebuying. An advisor can help you understand technical details and key terms like upfront costs, market trends, property tax laws in different zip codes and fair housing rules, so that nothing comes as a surprise when it’s time to close on the home.
An advisor will also ensure you’re taking advantage of lender-backed resources available to help get you into your home on time. For example, Chase’s Closing Guarantee, commits to closing customers on their new homes in as little as 21 days or gives them $5,000 cash. The program offers buyers peace of mind, knowing that they can close on their new home without delay or receive compensation that can be put toward additional costs.
It’s in your best interest to shop around and find a lender who will help you find the lowest rates and fees. Prequalifying with multiple lenders can be a good way to check quotes, and it also allows you to keep a pulse on how the rapidly changing interest rates can impact the amount of house you can afford.
While the homebuying experience can be stressful, we’re here to help you find the best options available for you. There are also plenty of other resources available – especially if you are a first-time homebuyer – to boost your homebuying knowledge, like the Beginner to Buyer podcast, which offers prospective homebuyers a place to get answers to all their homebuying questions. Every episode offers conversations with real buyers and expert guests about each step of the process, from mortgage application to closing.
Learn more about the homebuying process, here.
Sponsored content from JPMorgan Chase & Co.
