Why Is It so Important to Be Pre-Approved in the Home buying Process?

Why Is It so Important to Be Pre-Approved in the Homebuying Process? | MyKCM

You may have heard that pre-approval is a great first step in the homebuying process. But why is it so important? When looking for a home, the temptation to fall in love with a house that’s outside your budget is very real. So, before you start shopping around, it’s helpful to know your price range, what you’re comfortable within a monthly mortgage payment, and ultimately how much money you can borrow for your loan. Pre-approval from a lender is the only way to do this.

According to a recent survey from realtor.com, many buyers are making the mistake of skipping the pre-approval step in the homebuying process:

“Of over 2,000 active home shoppers who plan to purchase a home in the next 12 months, only 52% obtained a pre-approval letter before beginning their home search, which means nearly half of home buyers are missing this crucial piece of paperwork.

This paperwork (the pre-approval letter) shows sellers you’re a qualified buyer, something that can really help you stand out from the crowd in the current ultra-competitive market.

How competitive is today’s market? Extremely – especially among buyers.

With limited inventory, there are many more buyers than sellers right now, and that’s fueling the competition. According to the National Association of Realtors (NAR), homes are receiving an average of 2.9 offers for sellers to negotiate, so bidding wars are heating up.

Pre-approval shows homeowners you’re a serious buyer. It helps you stand out from the crowd if you get into a multiple-offer scenario, and these days, it’s likely. When a seller knows you’re qualified to buy the home, you’re in a better position to potentially win the bidding war and land the home of your dreams.

Danielle Hale, Chief Economist for realtor.com notes:

“For ‘a buyer in a competitive market, it’s typically essential to have pre-approval done in order to submit an offer, so getting it done before you even look at homes is a smart move that will enable a buyer to move fast to put an offer in on the right home.’”

In addition, today’s housing market is also changing from moment to moment. Interest rates are low, prices are going up, and lending institutions are regularly updating their standards. You’re going to need guidance to navigate these waters, so it’s important to have a team of professionals (a loan officer and a real estate agent) making sure you take the right steps along the way and can show your qualifications as a buyer at the time you find a home to purchase.

Bottom Line

In a competitive market with low inventory, a pre-approval letter is a game-changing piece of the homebuying process. If you’re ready to buy this year, let’s connect before you start searching for a home.

Posted on August 27, 2020 at 8:06 am
Desiree Stanley | Category: Real Estate | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

The Top Reasons People Are Moving This Year

The Top Reasons People Are Moving This Year | MyKCM

Today, Americans are moving for a variety of different reasons. The current health crisis has truly re-shaped our lifestyles and our needs. Spending extra time where we currently live is enabling many families to re-evaluate what homeownership means and what they find most important in a home.

According to Zillow:

“In 2020, homes went from the place people returned to after work, school, hitting the gym or vacationing, to the place where families do all of the above. For those who now spend the majority of their hours at home, there’s a growing wish list of what they’d change about their homes, if possible.” 

With a new perspective on homeownership, here are some of the top reasons people are reconsidering where they live and making moves this year.

1. Working from Home

Remote work is becoming the new norm in 2020, and it’s continuing on longer than most initially expected. Many in the workforce today are discovering they don’t need to live close to the office anymore, and they can get more for their money if they move a little further outside the city limits. Lawrence Yun, Chief Economist for the National Association of Realtors (NAR) notes:

“With the sizable shift in remote work, current homeowners are looking for larger homes and this will lead to a secondary level of demand even into 2021.”

If you’ve tried to convert your guest room or your dining room into a home office with minimal success, it may be time to find a larger home. The reality is, your current house may not be optimally designed for this kind of space, making remote work and continued productivity very challenging.

2. Virtual Schooling

With school about to restart this fall, many districts are beginning the new academic year online. Education Week is tracking the reopening plans of schools across the country, and as of August 21, 21 of the 25 largest school districts are choosing remote learning as their back-to-school instructional model, affecting over 4.5 million students.

With a need for a dedicated learning space, it may be time to find a larger home to provide your children with the same kind of quiet room to focus on their schoolwork, just like you likely need for your office work.

3. A Home Gym

Staying healthy and active is a top priority for many Americans. With various levels of concern around the safety of returning to health clubs across the country, dreams of space for a home gym are growing stronger. The Home Builders Association of Greater New Orleans explains:

“For many in quarantine, a significant decrease in activity is more than a vanity issue – it’s a mental health issue.”

Having room to maintain a healthy lifestyle at home – mentally and physically – may prompt you to consider a new place to live that includes space for at-home workouts.

4. Outdoor Space

Especially for those living in an apartment or a small townhouse, this is a new priority for many as well. Zillow also notes the benefits of being able to use yard space throughout the year:

“People want more space in their next home, and one way to get it is by turning part of the backyard into a functional room, ‘an outdoor space for play as well as entertaining or cooking.’”

You may, however, not have the extra square footage today to have these designated areas – indoor or out.

Moving May Be Your Best Option

If you’re clamoring for extra space to accommodate your family’s changing needs, making a move may be your best bet, especially while you can take advantage of today’s low mortgage rates. Low rates are making homes more affordable than they have been in years. According to Black Knight:

“Buying power for those shopping for a home is up 10% year over year, with home buyers able to afford nearly $32,000 more home than they could have 1 year ago while keeping their monthly payment the same.”

It’s a great time to get more home for your money, just when you need the extra space.

Bottom Line

People are moving for a variety of different reasons today, and many families’ needs have changed throughout the year. If you’ve been trying to decide if now is the time to buy a new home, let’s connect to discuss your needs.

Posted on August 24, 2020 at 8:28 am
Desiree Stanley | Category: Real Estate | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Mortgage Rates & Payments by Decade [INFOGRAPHIC]

Mortgage Rates & Payments by Decade [INFOGRAPHIC] | MyKCM

Some Highlights

  • Sometimes it helps to see the dollars and cents you’ll save when you purchase a home while mortgage rates are low.
  • Today’s low rates mean it’s less expensive to borrow money, so the savings over the life of your loan is significant.
  • Let’s connect to determine the best way to position your family for a financially-savvy move in today’s market.
Posted on August 14, 2020 at 8:04 am
Desiree Stanley | Category: Real Estate | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

Interest Rates Hover Near Historic All-Time Lows [INFOGRAPHIC]

Interest Rates Hover Near Historic All-Time Lows [INFOGRAPHIC] | MyKCM

Some Highlights

  • Mortgage interest rates have dropped considerably this spring and are hovering at a historically low level.
  • Locking in at a low rate today could save you thousands of dollars over the lifetime of your home loan.
  • Let’s connect to determine the best way to position yourself for a move in today’s market.
Posted on May 22, 2020 at 9:01 am
Desiree Stanley | Category: Real Estate | Tagged , , , , , , , , , , , , , , , ,

Buying a Home Right Now: Easy? No. Smart? Yes.

Buying a Home Right Now: Easy? No. Smart? Yes. | MyKCM

Through all the volatility in the economy right now, some have put their search for a home on hold, yet others have not. According to ShowingTime, the real estate industry’s leading showing management technology provider, buyers have started to reappear over the last several weeks. In the latest report, they revealed:

“The March ShowingTime Showing Index® recorded the first nationwide drop in showing traffic in eight months as communities responded to COVID-19. Early April data show signs of an upswing, however.”

Why would people be setting appointments to look at prospective homes when the process of purchasing a home has become more difficult with shelter-in-place orders throughout the country?

Here are three reasons for this uptick in activity:

1. Some people need to move. Whether because of a death in the family, a new birth, divorce, financial hardship, or a job transfer, some families need to make a move as quickly as possible.

2. Real estate agents across the country have become very innovative, utilizing technology that allows purchasers to virtually:

  • View homes
  • Meet with mortgage professionals
  • Consult with their agent throughout the process

All of this can happen within the required safety protocols, so real estate professionals are continuing to help families make important moves.

3. Buyers understand that mortgage rates are a key component when determining their monthly mortgage payments. Mortgage interest rates are very close to all-time lows and afford today’s purchaser the opportunity to save tens of thousands of dollars over the lifetime of the loan.

Looking closely at the third reason, we can see that there’s a big difference between purchasing a house last December and purchasing one now (see chart below):Buying a Home Right Now: Easy? No. Smart? Yes. | MyKCM

Bottom Line

Many families have decided not to postpone their plans to purchase a home, even in these difficult times. If you need to make a move, let’s connect today so you have a trusted advisor to safely and professionally guide you through the process.

Posted on April 30, 2020 at 10:58 am
Desiree Stanley | Category: Real Estate | Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,