This year’s homebuying season has been like no other.

It got off to an early start followed quickly by an abrupt stop as states locked down during the early days of the pandemic. Then, it roared back with historically low interest rates and many lockdown-weary buyers looking for space to better fit their needs to work and entertain at home.

As we settle into the fall and a time of year when some buyers usually retreat, you may be wondering what’s happening in the marketplace now. Is it still a good time to buy?

True to what we’ve been seeing all year, buyers have been bucking the usual trends and continue to actively buy as summer winds down and we head into cooler weather months. Across the industry, demand for mortgages to buy a home has been running higher than a year ago, according to mortgage application data from the Mortgage Bankers Association for the first part of September.

In addition, preliminary data shows contract signings for the four weeks ending Sept. 20 were up 23 percent compared to a year ago1, according to the National Association of REALTORS.

Buyers are still in the market, though the number of properties for sale has been low. Even so, fall and winter months may provide a good time to look and traditionally provide buyers a chance to shop in an environment that may offer a little less intense competition.

GETTING READY TO BUY

If you’re in the market to buy, here are a few considerations to get you started:

• Know what kind of payment you can manage. Our home mortgage consultants can help work with you to have this discussion and help figure out what might work with your budget. Take a look at your overall expenses, including what you are paying for rent or a mortgage payment right now, and then decide how much room you have to maneuver.

• Make sure you are up-to-date on your current mortgage or rent payments and check your payment history. Lenders may not offer you a new loan if there are signs you may be currently experiencing financial difficulties or if you haven’t demonstrated the ability to consistently manage your mortgage or rent payments in the past. It’s always a good idea to be up-to-date on all your bills when you begin the mortgage process.

• Understand your down payment options. Many consumers think they can’t get a loan unless they have 20 percent of the purchase price to put down. That’s simply not the case. There are a number of low- and no-down payment home financing options that may fit your financial situation. Be sure to talk to a home mortgage consultant about home financing options.

• Have money in savings. This pandemic has brought home the importance of having savings in the bank. Owning a home means you’ll have expenses for repairs and updates, and the pandemic has shown us the importance of having some money set aside to help us navigate rainy days. It’s good to have savings set aside and continue to add to that pool even after you buy the house.

• Embrace digital tools. We’ve been very focused on helping our customers manage the mortgage process in a more contactless way. Most of our customers use our online mortgage application process, and they have options to upload documents and sign disclosures electronically during the process. We even have options for more contactless closings. These are all tools we’ve been working on to add convenience, and we’ve accelerated progress to help our customers feel safe during the pandemic.

OTHER IMPORTANT FINANCIAL CONSIDERATIONS

As you get out there and begin house-hunting, there are a few other important considerations to keep in mind.

• Don’t get carried away when bidding on a house in this competitive environment. You need to know your buying budget and stick to it. It’s really easy to get emotional about a home and want to buy at all cost, but keep the focus on the smart financial decisions you’ve made about budget and manageable payments.

• Remember that there are more ways than one to take advantage of the current rate environment. Talk with your home mortgage consultant about your goals and what financial options work best for you. For example, are you looking for the lowest possible payment or is you biggest concern the lowest possible closing cost? These are all part of a good discussion as you set out to buy.

• Finally, think about buying a home as a series of financial trade-offs you will need to make. Most people don’t get their dream home right out of the gate. It’s usually a discussion of what’s the best possible home I can buy based on the budget I have. As you get close to finding that home, you’ll find yourself trading your dream kitchen for a bigger garage or discover you’re OK with just a one-car garage because the house comes with a swimming pool. It’s all part of the process.

The fall and winter months really can be a great time to buy a home, if you’re ready. As a buyer, take your time, do your financial homework and dive into the opportunity.

Marty Widergren is the divisional sales manager for the Southwest Division for Wells Fargo Home Lending (WFHL), one of the nation’s leading originators of residential mortgages. He is responsible for leading Home Lending’s distributed sales team, which originates residential mortgage loans across the states of Utah, Arizona, Hawaii, Texas, Central Valley and Southern California. His group provides a full range of traditional and specialty mortgage solutions to meet the needs of a wide range of consumers, from first-time buyers just beginning their home-buying journey to more experienced consumers looking to refinance or purchase another home. A more than 21-year veteran of the mortgage industry, Widergren joined Wells Fargo Home Lending in 2002 and held multiple leadership positions, as well as leading national work efforts associated with advancing our Distributed Retail sales model.

1 Copyright ©2020 “Weekly Housing Market Monitor.” NATIONAL ASSOCIATION OF REALTORS®. All rights reserved. Reprinted with permission. https://cdn.nar.realtor/sites/default/files/documents/2020-09-21-weekly-housing-market-monitor-09-24-2020.pdf

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