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How to's and money-saving tips from resident homeowner and mortgage professional, Cathy West

Understanding options in the housing market

Understanding options in the housing market

When people are thinking about getting into the housing market – especially for the first time – they likely have a large number of questions. Issues such as how much house is reasonably affordable based on an individual's financial situation, how to get a mortgage that makes sense and the process of shopping for a property are all pressing.

Many of these problems can be exacerbated for those who are self-employed. They may run into far more stringent financial checks put in place by lenders wary of unpredictable income and, therefore, how likely such a person will pay mortgage bills each month.

Nonetheless, for those looking to get into the market today, there are some common paths regardless of their employment situations. The first is for would-be homeowners to examine their finances and determine if they have the down payment savings and credit scores necessary to qualify for a mortgage, according to Hawaii-based real estate agent Lorie Am Rhein.

After that, they should also think about what they want from their homes in terms of features that are "must-haves" versus "nice-to-haves," Rhein noted. Doing so can help them determine the reasonable price range for such a property and what that figure means for their ability to afford such a property.

What comes next?
Once people have determined the kinds of homes they want, they will likely also need to look into what's available in their areas, or properties to which they may now be considering moving, according to agent Brenda Hansen. For instance, those who have children will certainly want to think about the quality of the school district into which they are moving, among other issues, and it may also be wise to talk to a real estate professional about other factors such as resale prices, pending infrastructure changes that could alter the property's value and so on.

It may also be important to consider the economic situation in the town or neighborhood. If there is a chance prices could drop, that shift might negatively affect would-be buyers at some point in the future, especially if they're using this property as a means of building equity so they can trade up in a few years.

Reviewing the options
As it relates to must-haves and nice-to-haves, agents can advise clients about what's likely to be available in a target price range, but it's also important for shoppers to be flexible with their demands, according to Norhill Realty. If a home has a handful of must-haves but doesn't tick every box on a buyer's list, that shortfall might not be reason enough to move on, especially in today's competitive market.

Staying in close contact with an agent throughout the process will help keep first-time buyers in particular grounded and ensure they understand everything they need to know throughout the sale and into their time as homeowners. That might be particularly important for self-employed shoppers, simply because their mortgage application process is likely to be far more complicated than what other people will likely have to face.

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