How Should I Prepare for Buying a Home in 2022?

cube turns from 2021 to 2022 on wooden base

The last year and a half has seen one of the hottest real estate markets in recent history. With a more buyer-friendly environment being expected in 2022, it’s important to give yourself an advantage over possible competition.

Start With Improving Your Credit However You Can

The historically low interest rates we’ve been seeing will begin to rise as we get into 2022. This isn’t a concern regarding mortgage payments as lower prices will compensate for the change. Where it matters is that there is now a larger range of interest rates you could get, determined by your credit.

Remain current on all bills and if any loans are able to be paid off early you may consider doing so to reduce your debt-to-income ratio, or DTI. If you have lines of credit with high utilization then these may be a good target for extra payments.

Your credit score can range from 300 up to a perfect 850. Having the highest score isn’t required to get a great interest rate but the higher your score, the lower your rate. Typically lenders look for a score in the high 700’s for the lowest tier of interest rates but lower scores can still be approved with a higher rate or with a co-signer.

Have a Down Payment Ready To Go

A good rule of thumb is to save at least 20% of the home’s listing price for a down payment. With so many potential buyers about to enter the cooler market, it’s a good idea to save up more if possible to provide as much cash up front as you can.

When you’re able to quickly provide an offer on a house, you’ll be one of the more competitive bidders around. Even as the prices of homes fall, inventory isn’t projected to catch up for a while due to ongoing supply chain issues impacting new construction.

Anything that can give you a competitive edge over other buyers will be key. Working with a local real estate team such as ours here at David Curri means being able to quickly complete all parts of the home buying process and secure a property.

Remain Patient and Don’t Overpay

Being quick on the draw when the perfect listing pops up doesn’t mean you should be willing to pay any price asked. Some homeowners will still be trying to get a high price even if the rest of the market has relaxed.

Work with your real estate agent to monitor properties that are asking for too much in order to swoop in as soon as a price drop happens. Many high-priced listings will be on the market longer than others and left alone because of the price. These are prime options for a price drop so don’t be deterred if your preferred home is listed higher.

There’s still time to prepare for a home purchase in 2022. Reach out to the David Curri team today to get started and we’ll work together to make you the most competitive bidder on the market.