Have you been renting the current home you’re living in for years now and thinking of buying your first home? Or perhaps you’re looking to upgrade to a bigger house, but aren’t sure if now is the right time? According to a recent Chase Homebuyer Survey, spring 2015 is the perfect time to buy your first home, especially since interest rates are currently at the lowest they’ll be this year. The Money Coach, Lynnette Khalfani-Cox joined me for an interview recently to dish on how to land your dream home in 2015, and the simple steps you need to take in order to do so.
Candace Rose: What do home buyers and home owners need to know about the home buying process to beat the competition and land their dream homes?
Lynnette Khalfani-Cox: “I think the first step for people to realize is to be a smart home buyer, you’ve got to act on information and not emotion, so a recent Chase Homebuyer Survey found that 70% of prospective home buyers said that they were worried that they missed out on an opportunity to buy a home at the best price. You don’t want to let those kind of worries cause you to overpay for a house. You want to work with a realtor, you want to get comparable sales prices for similar homes and you want to have a strong sense for how quickly homes are moving in your area because you’ll need to know how quickly you’ll need to move if you want to be competitive with other buyers.
Another thing that I think people should look to do is to get pre-qualified. I can’t stress this enough because this is going to help you in two key ways. When you go to a lender, you need to have your financial documents in order. You’ll want to bring your bank statements, your income records, your recent paycheck stubs, your tax records as well. That will help you to really sail through the mortgage side of things and get a mortgage a lot faster, but that pre-qualification letter will also do something else for you in a competitive marketplace, it’s going to show a seller that you’re a very serious buyer so it helps you to stand out from the competition and get a leg up on other buyers. The seller doesn’t want the deal to fall apart at the last minute just because you can’t get a mortgage, so that pre-qualification letter really does help you.”
Candace Rose: Rates are at a historical low. What do low interest rates mean for home buyers and home owners?
Lynnette Khalfani-Cox: “Well, right now we know that low interest rates are in fact spurring people to buy homes. About a third of people surveyed said that they want to buy sooner, rather than later in order to take advantage of low interest rates. Economists, of course are predicting that later in 2015 we’re going to see interest rates rise.
There’s also another factor that’s driving the home buying decisions of a lot of people, the Chase Survey found that 20 percent of prospective home buyers said they’re number one reason for wanting to buy is actually rising rental rates. A lot of people have been taking a look at what’s been going on with their landlords lately and they’re coming to the conclusion that ‘Listen, my rent has gone up the last three, four years or more’; and they’re thinking home ownership might actually be a better value right now.
Ultimately of course, you’ve got to do the homework. You’ve got to look at things and say is it better to rent versus buy? Personally, I think if you’re going to be in a house for five years or longer, and you have a degree of confidence that you want to stay put for a while buying is typically going to be the most financially advantageous route. If you think ‘Hey, I only might be here for two or three years or so’, probably renting is going to be the better option. Do some homework around this, get online, educate yourself.
You can check out Chase.com/MyNewHome. It will give you a lot of tips and tools, information about the home buying process, about pre-qualification, mortgage calculators and even help you to do an analysis to to say ‘Hey, should I rent or should I buy’ because buying isn’t for everyone and for those of us who have made that leap to home ownership, it’s really a great thing when you’re a happy, successful home owner and you know that it’s going to be sustainable for you in the long run as well.”