5 Tips for Buying a Home in 2022
With a chronic shortage of affordable and available homes, the nation's population is struggling to find housing options in today's marketplace. A severe lack of new construction is partially to blame for the acute shortage of available housing. Today's scale of underbuilding and rising demand for available homes has led to an imbalance of supply and demand. Towards the end of 2021, the United States was short between 5.5 million and 6.8 million housing units, according to the National Association of Realtors. This statistic factored in single-family homes, townhouses, condos, and rentals, too. With the housing market not budging any time soon, consider these 5 tips when purchasing a home in 2022:
1. Understand what you can afford
Firstly, it's important to understand what you can afford and can't afford when searching for a home. It's easy to fall in love with a gorgeous home you saw during your online search, but the question is- can you afford it? It's more important than ever to understand your budget and choose a new living space that is in your price range. Sticking to a budget doesn't mean you won't find a beautiful space- it just means you won't have to sacrifice in other areas of your life to accommodate housing costs. (Take a look at available homes in your desired area here.)
Consider these four factors before committing to your dream home: How much you have saved for a down payment; how much your household earns; what debt you carry; and your credit score. Your credit score will directly affect the interest rate of the loan you take out and it also impacts how much you can borrow. Once you have a good grasp of the factors that affect how much you can spend on your new home, it's time to get pre-approved for your loan.
2. Get pre-approved for your loan
Getting pre-approved for a loan allows you to know exactly how much you can afford for your monthly mortgage. Your lender will factor in your debt payments, income, and credit score, so you know precisely how much you will be spending on mortgage payments. Remember that you must get a true pre-approval letter from a lender after the information from your file has been verified. Pre-approval also lets homeowners know how serious you are about purchasing their home, giving you an edge when multiple offers are received on a particular property.
3. Decide what you're willing to compromise on
Unfortunately, crossing off everything on your wish list will be difficult. Consider creating a wish list of all the features and characteristics you would love your future home to have. From that list, determine what the absolute musts are. This will make it easier when you begin your home search, so you know what factors are non-negotiable for you.
4. Consider unique ways to purchase your first home
If you are wanting to purchase a home in a particular neighborhood, but can't afford it, get creative:
- Consider buying a multi-unit property, where you live in one unit and rent out the others
- Buy with a partner, friend, or family member
- Build a multigenerational household to split mortgage costs
- Buy an investment property that you rent out to others (which you can move into yourself, too)
5. Reach out to the professionals
If you have any questions about buying a home, get in touch with the Brent Germany Team. Our experienced team of real estate agents are eager to share their knowledge and expertise of today's market with you. It's important to educate yourself before buying a home, and what better way than consulting the experts.
Brent Germany Team is an award-winning team of expert real estate agents in the DFW metroplex. If you are interested in buying or selling a home, contact us for a free consultation. We stand ready to partner with you today.