For the first time, Millennials are cutting back on spending money on multiple streaming subscriptions, $10 drinks, and avocado toast. They are dipping their feet into purchasing their first home. The current “seller’s market” conditions can be tough for some buyers though, so being prepared is more important now than ever.
Buying in a Seller’s Market
The first step in the home buying process is finding the right real estate agent. Your agent should be trustworthy and someone who is knowledgeable about the area, sales contract, and local programs that may be able to save you money. Once you find the perfect agent, ask them to refer you to their preferred local lenders. When talking with lenders, not only should you focus on interest rates, but also ask about their in-house processing and underwriting. This may be able to give you a competitive advantage against other offers in a seller’s market.
Once you’ve decided on your lender, they will need several documents to help them determine your eligible purchase price. Now is the perfect time to get your documents in order, including 30 days of pay stubs, two years of tax returns and/or W2s and 1099s, and two consecutive bank statements. Providing these documents in a timely manner can help expedite the pre-approval process and prevent delays once you’re under contract.
The lender will also look at your median credit score from the three major credit bureaus. Since your credit score has a direct effect on your interest rate, it’s important to pay close attention to your score. If your credit score needs a little help, talk to your Realtor and lender to see if they have recommendations on how to boost your score or programs that may be able to help.