BY: Paul G. Brooks
With the weather finally starting to cooperate and spring just around the corner, the 2019 housing market is beginning to heat up in earnest. Loan applications for newly constructed properties accelerated going into this year’s peak home-buying season, contrasting with the weakness seen at this time in 2018. Year-over-year new-home purchase applications for March were up 7%; compared to the previous month, they increased 19%.
In 2018, higher year-over-year interest rates dampened demand for new-home loan applications. This year, the convergence of declining mortgage rates and the spring buying season is supporting stronger housing demand and activity. Additionally, according to the Mortgage Bankers Association, the decrease in average loan size is suggestive of builders shifting production to lower-priced homes, for which inventory continues to be tightest and home-price growth most robust.
In order to get that dream home you’ve been searching for, the first place to start is by getting pre-approved for a loan by your local State Bank of Cross Plains lender.
Obtaining a home mortgage pre-approval signals to real estate agents and home sellers that you are serious about making a purchase. To start, you need to ensure that your credit is healthy: Obtain a free copy of your credit report from each of the three major U.S. credit bureaus at AnnualCreditReport.com. Check for late payments and collections, pay down balances on your credit cards, and do whatever you can to make yourself as attractive and credit-worthy an applicant as possible. If your credit score is low, ask your lender for ideas on how to improve it.
A few items you’ll need to have readily available to garner that pre-approval letter are: Current and prior year W-2s, bank statements, and pay stubs. In addition, if you are self-employed, you’ll need your last two years of federal tax returns, along with any 1099s. Your lender will take this information and review it with you, to make sure nothing was missed.
Equipped with your credit profile and income data, as well as knowledge of the amount of money you are asking to borrow, your lender will have all the tools necessary to make a determination regarding pre-approval. Once received, you can provide your loan pre-approval letter to real estate agents and sellers, to prove to them that you have done your due diligence and are serious about taking the next step toward home ownership.
A little preparedness on your part, before going out and falling in love with a new home, can help you understand exactly what you can afford, and will go a long way toward helping you secure your dream home.