Summer is winding down and kids are heading back to school. The Omaha real estate market continues to buzz, so we wanted to put together a little guide for homebuyers this fall to help ease the process.
Be Prepared with a Down Payment
If you’re considering buying a home, start saving for the down payment early. It’s common for many people to put down 20% of the cost, but many lenders permit less. But even a small percentage can be a hefty amount. Even 5% of $200,000 is $10,000. If you’re struggling to figure out how to save for a down payment, think about saving tax refunds or work bonuses. Or, set up automatic savings that take a certain portion of your check each payday. No matter how small the amount, it can add up quickly. Making a higher down payment will mean a lower mortgage payment each month.
Research Local and State Assistance Programs
In addition to federal programs, many states offer assistance programs for first-time homebuyers. Perks include down payment assistance, closing cost assistance, tax credits, and discounted interest rates. Research your area and see if you qualify.
Determine Your Budget Before You Start House Shopping
To save yourself from heartbreak, nail down your budget before you start looking for your dream home. Knowing what you can safely spend on a home will help narrow down your search. Speak with your financial advisor, talk with a mortgage lender, or use a home affordability calculator to help you determine your price range.
Get a Pre-Approval Letter
If you want to be taken seriously by a seller and have an advantage over other shoppers, get a pre-approval letter from a mortgage lender before you start looking at homes. Getting pre-qualified for a mortgage gives you an estimate of how much a lender may be willing to lend based on your income and debts.
Budget for Closing Costs and After Move-In Expenses
Closing costs generally run about 2% to 5% of your loan amount. These are costs required at the close of your mortgage. In addition to budgeting for your down payment and closing costs, consider what you may need once you move into your new home. This may be new paint, furnishings, appliances, rugs, and light fixtures.
Understand the Competitive Market
The Omaha housing market is incredibly competitive right now. Most homes for sale get multiple offers, often with waived contingencies. This means it may be harder to get your offer accepted if it is contingent upon the sale of your existing home. Homes are selling around their list price and go pending within nine days. Popular homes can go pending within three days and can sell about 3% above the list price. So understand there may be some heartbreak involved if you lose out on your first home choice. But don’t let it deter you! Keep looking to find the right home for you and your family.