Top 5 Tips for Buying A Home in 2023
If you’re looking to buy a home soon, you’re probably wondering whether 2021 will be different from past years. After all, we’re coming out of 2022, a year that was challenging for all of us in one way or another. It’s hard to imagine that the mortgage industry stayed the same during such a crazy year. If you’re thinking 2023 will be different, you’re right! We’re here to tell you what will be different and what will stay the same. Read on to learn our top 5 tips for buying a home in 2023, as well as what to look out for in the new year!
Know Your Budget and Avoid Foreclosure
Before you decide on a home – maybe even before shopping for your new home – it’s very important to understand what your budget is. This is especially important after a year like 2022, which may have changed your circumstances. When you take stock of your financial situation, you should begin with your monthly income. As a general rule, your housing expenses should not cost more than 25-35% of your monthly income before taxes are taken out. To calculate this, multiply your monthly income by 0.25-0.35. That’s your budget!
Avoiding foreclosure is easier if you know your budget and stick to it. Here are some tips to avoid foreclosure if you’re having trouble making your mortgage payments now. But the best way to avoid foreclosure is to make sure you choose a home that will be affordable for you in the long run. If you pick a home that might be on the more expensive side for you, it’s important to have a plan in case you run into unexpected expenses in your life, like large medical bills or losing a job. Your best bet is to choose a home that is within your budget. We can help you figure out what that looks like for you!
Understand Property Taxes Where You Plan on Living
Property taxes can be totally different between states, or even between counties in the same state. That’s why it’s so important to know what property taxes are like in the state or county where you will be buying a home. Now that we’re in 2023, it’s worth checking to see whether your taxes have changed under the new administration, too. The U.S. Census Bureau reported that the average property tax for a household is $2,375, but that may not be true for you. For example, states like Colorado and Tennessee have even lower property taxes, but states like New Jersey and Connecticut have much higher property taxes. We recommend you search online for your future home’s county website, which should have information on property taxes.
Get Pre-Qualified with A Lender First
Something that will help you to buy a home is prequalification. If you get prequalified with a lender before you begin looking for a home, this can give you a good sense of your budget, because you will know the approximate size of the loan you qualify for. To be prequalified, you will have to provide information like your income, assets, debt, and credit score. This means they can give you a very specific idea of what you will get approved for. You can also check your credit score so that you know exactly what the lender will be looking at. Something that’s important to know is that getting prequalified does not guarantee that you will be approved for a loan. But it does mean you’re more likely to get approved if you stay within the guidelines of your prequalification.
You may have also heard the term preapproval. Prequalification and preapproval are terms that can have the same meaning! Some lenders use the term prequalification to refer to a kind of assessment that is less precise and doesn’t require the lender to check your credit score, but that’s not what we mean in this article. When we prequalify you, we have reviewed your income, assets, debt and credit score so you can make an offer on a home with confidence. Every lender is different in how they give prequalification, but it is a good idea to take the time to get prequalified with us.
Slow Down and Don’t Rush the Process
This may seem obvious, but it’s an important reminder! This is one tip that hasn’t changed since 2020. Once you’ve decided that you want to buy a home, it’s easy to get excited about it and forget important details. When you can’t wait to live in your brand-new home, it’s only natural to want things to move faster with the seller and with your mortgage lender. But trust us – it’s easier to make mistakes when you’re rushing, and you want to be able to enjoy your new home without worrying about your mortgage!
Be Aware of Regulatory Changes
If you are a female Veteran or a Native American Veteran, this tip is for you. Recently, the VA department changed the requirements for disability compensation for female Veterans with conditions due to military sexual trauma. And Native American Veterans now have greater access to health care services because of recent veteran’s health legislation. To find out how these new regulations will affect you and your options, you need a lender who is familiar with the new information and will be on your side.
So, What Now?
The best thing to do now is take stock of your options, following the tips we’ve laid out above. We can help you with personalized advice for buying a home in 2023!
One thing’s for sure: 2023 will be historic for purchasing or refinancing a home as we look forward to our economy bouncing back from the events of 2020 and all that came with 2022.
Although we can’t predict what will happen in 2023, we know that interest rates are low now, and will stay that way for a while but could rise at any time. Because of that, our last tip is to call us at 800-720-0250 to find out if you qualify instead of using an online loan calculator. Our quotes are always free, and we want to serve you as we look forward to a new year!
VA Loan Requirements
The VA Home Loan benefit is one of the most significant benefits for active military members and Veterans. A VA Home Loan comes with financial benefits for qualified Veterans. The VA loan income guidelines and credit score for VA loan approval are more flexible than other home loan programs. For many Veterans, the VA Home Loan benefit is their only option for owning a home. See if you qualify