After spending so long in a seller’s market, many of us are waiting to see a cooler market going into 2022. If you’re part of this group eager to secure a home next year, there are certain steps you can take to help prepare yourself.
Improve Your Debt-to-Income Ratio
Your debt-to-income ratio, or DTI, is the difference between your monthly income and financial responsibilities. You’ll want to demonstrate the lowest possible DTI ratio in order to secure lending more easily.
On top of your DTI is your FICO credit score. The higher your score, the higher your approval odds when applying for a mortgage. You’ll also be able to secure lower interest rates with a strong credit history and score.
If you’re due for a promotion or new position within your career, it may be the time to start pressing for that to happen. Proof of higher income will both lower your DTI and increase the amount a lender may be comfortable providing you. Securing funding is the only way to secure your dream home in 2022.
Buffer Your Savings Beyond Just a Down Payment
Having a down payment of at least 20% of the home’s sales price is the rule of thumb for a home purchase. You’ll also need to be ready for other fees such as inspections, closing costs and processing fees that come along with a home purchase.
A side effect of boosting your credit and saving up more money is that you’ll begin receiving offers for various credit cards and loans in both your mail and email. It’s important to disregard these offers for the time being in order to keep your now lower DTI in prime position.
Cut down on monthly expenses and tuck it away to have as much saved up as possible before the 2022 market kicks in. Demonstrating that you’re a financially secure applicant can lead to faster approval times and an easier attempt at securing a sale.
Be Ready to Shop for the Best Mortgage
After getting your finances in peak condition, it’s time to start the next step which is getting the best terms on your mortgage for your lifestyle and financial goals. While interest rates are expected to increase in 2022, they’ll be slowly rising from historical lows with lower listing prices balancing out the change.
What this means for you is that the sooner you’re able to ready yourself for a home purchase, the more time you’ll have to lock in these incredibly low interest rates. Bank pre-approval is often needed in the current market to even make a bid and this trend will likely carry over into the start of 2022.
Always Work With a Local Agent That Knows the Area
The final and most important step of the process is finding a real estate agent that puts your goals first and knows the neighborhoods like the back of their hand. This is where the Curri Kirschner team comes in with decades of combined experience working locally in Brevard County.
When you’re ready to take advantage of the shifting market 2022 is expected to bring, get started with one of our local agents today. Our selection of listings has something for everyone from full-sized families to single young professionals looking for a slice of paradise to work from.