Suppose you’ve made up your mind that 2023 is going to be the year you buy a new home or jump onto the housing ladder for the first time. In that case, there are some important things to be aware of, especially as the competition within the housing market is predicted to be just as intense over the coming twelve months as it was in 2022.
Below you’ll find the key things you need to know to both maximize your chances of getting a preferential mortgage deal and how to capitalize on the likely economic outlook of 2023.
Take Care of Your Credit Score
To have a chance of being offered a mortgage with the best interest rates, taking steps now to boost your credit score is vital. The average credit score for homebuyers in the USA is 754, which is in the ‘good’ range. If you can increase your credit score to 800 or more, you’ll be in the ‘excellent’ category in terms of your credit score and, therefore, much more likely to receive preferential mortgage interest rate offers. But you’ll need to act quickly – it can take agencies up to sixty days to update your credit score! Make sure you report a blank 1098 form to the US government about any kind of information related to the mortgage.
Ensuring bills are paid on time is one of the simplest ways to boost your credit score. It’s also important to pay down your credit card and overdraft balances – being near your limits can affect your credit score negatively. Frequently applying for credit can also damage your score, so take care with this, too.
Consider Taking Out a Home Warranty
Moving home or into a first property can entail plenty of expense, and you may be tempted to skip taking out a home warranty policy. Think carefully about this, however, as such a policy can protect you from nasty bills caused by an unexpected boiler breakdown or plumbing problems, for example.
A home warranty will typically cover most of your new home’s major systems and appliances. Most companies will also allow customers to extend their coverage, if needed, by adding protection for things like swimming pool pumps and water filtration systems.
Look at these Puls Home warranty reviews to get more of an idea about how a home warranty policy works and what it covers. This company offers four different types of plans to suit specific requirements and provides a twelve-month workmanship guarantee on repairs carried out as part of the protection.
Buy Vs. Build
The decision to buy or build a house is a significant one that depends on various factors. Buying a house offers the advantage of convenience, as you can move into a ready-to-occupy home without the time and effort required for construction. It also provides a range of options in terms of location, design, and amenities, allowing you to find a home that suits your immediate needs.
On the other hand, working with reliable home builders on building a house gives you the opportunity to create a custom living space that is tailored to your preferences and requirements. It offers greater control over design, materials, and functionality, allowing you to personalize every aspect of your home. Building also allows you to incorporate energy-efficient features and modern technologies from the start. Ultimately, the decision between buying and building depends on your priorities, budget, timeline, and desire for customization.
Time Things Perfectly
If you’re planning on buying a property, it’s advisable to have a mortgage pre-approval offer in place by Spring, as April and May are the months when the majority of homes come onto the market for sale.
It’s a good idea to start speaking with potential lenders and agents as early in the year as possible, when business is slower for them, rather than facing a scramble to identify a suitable lender once you’ve already spotted and got your heart set on the perfect property.
House Prices Are Expected to Drop
If you’re planning on buying a property in 2023, then you’ll be pleased to know that house prices are expected to drop this year – Goldman Sachs suggests that prices could fall by as much as between 5-10% over the course of 2023. It’s vital to remember that prices and their fluctuations can vary significantly in different regions.
Experts advise caution, however: the property price drop has primarily been caused by rising interest rates, and if the latter continues to rise, obtaining a mortgage could become unaffordable due to high-interest rates, even if property prices have fallen, so waiting to see if property prices decline further could be a risky strategy.
Demand Likely to Remain Strong
The demand for property is very likely to remain strong throughout 2023. However, financial analysts suggest that the impact of higher mortgage rates could well give buyers more leverage than sellers, meaning that if this is the year you’re planning to purchase a property, you could be in a very good position to do so.
If the buyers’ market materializes as expected, it’s a great idea to work with an experienced real estate agent who’ll be most likely to negotiate the sales price and concessions to further maximize your savings.
Choose an Agent Who Knows the Market
Finally, selecting a real estate agent who is familiar with the local market will likely serve you well. These professionals will know all about current trends in the area and plans that could affect the value of properties in the region.
Local agents are also a rich source of information on the area, especially useful if you’re moving to a new locality – and will be able to advise you on everything from local schools to recently approved building plans.
The Takeaway
This year could be the perfect time to buy a new property or to jump onto the property ladder for the first time. With a buyers’ market looking very likely, you may be able to take advantage of increased leverage and the possibility of a great deal.
It’s vital to plan out your buying journey and contact lenders and real estate agents as early in the year as possible best to make the most of the current economic situation and secure the home of your dreams.
