Spring Homebuying Season: 3 Tips to Help Land Your Dream Home

Spring homebuying season is heating up, with buyers and sellers looking to make their moves and ultimately land their dream homes.

The economic landscape of the past few years has certainly presented challenges for many homebuyers, however, with some being shut out of the market entirely by rising prices and interest rates. In an often-fast-moving market, it is important to do your homework and have a plan in place to help you reach the settlement table.

Here are tips to help you prepare to land your dream home.

Put Your Best Foot Forward

Economic headwinds from rising interest rates and potential “bidding wars” will be mostly out of your control, so it is important to focus on what you can control to help the process be as smooth as possible.

Mortgage interest rates are more influenced by the bond market, specifically, the 10-year Treasury yields, with fixed mortgage rates tending to go in the same direction as Treasury yields. It is important to understand the difference between how these rates ebb and flow versus the Prime Rate used for credit cards and other lending, which is tied to the federal funds rate.

You won’t be able to control the interest rate offer you receive entirely, but you can take steps to help ensure your credit is in a place where it will not negatively impact your offers. Work to build up your credit score and get your debt-to-income ratio in a good place, monitor your credit usage carefully even after receiving pre-approval, and build up your down payment to help ensure you’re ready when the opportunity arises.

Research Homebuyer Programs

Rising prices coupled with elevated interest rates have had a major impact on housing affordability in recent years, but there are many programs out there to help prospective homebuyers.

Speak with your trusted lender early in the process to help identify what federal, state and local homebuying programs you might qualify for.

In addition, many lenders offer first-time homebuyer and other affordable mortgage programs to help make your dream of owning a home a reality. These programs can assist eligible consumers with upfront costs, downpayment and closing cost assistance, and more. Programs will vary by lender, so it is important to work closely with your lender to see what is available to you.

Leverage Your Equity

Many prospective homebuyers have been shut out of the market in recent years. If you’re a current homeowner and have been unable to find the perfect home for your move, now could be a good time to consider leveraging your home equity to improve your current home instead.

Home values have increased substantially in recent years, which could provide an opportunity to get the features you want without the need for a move by leveraging a home equity line of credit (HELOC) or home equity loan.

Another alternative is to consider building your new home, which can help you get the features you desire while providing a bit more cost certainty.

Whether you’re just getting started on your house search or re-entering the market after taking a break, it is important to do your homework, know the key dos and don’ts of the mortgage process, and to stay in close communication with your trusted lender so you’re ready to land your first or next home.