Buying a home in 2019 is much the same as it has always been – except for a few important differences and changes. And the more you know about it, the better off you will be, being better able to minimize unpleasant surprises. Some of the things you will have to contend with in 2019 are a shifting lending landscape, rising interest rates, and changes in down payment expectations within local markets. All this means that you need to prepare yourself for buying a home in Tampa Bay before the end of 2019.
Importance of Pre-approval
One important change in the process of buying a home, especially before the end of 2019, is the current importance of pre-approval. Right now, inventory is low, so in many markets, pre-approval has become more important than ever for buyers. It’s a strong a seller’s market, and there are fewer cash buyers now, so sellers want to see buyers with that pre-approval letter in hand.
In short, it lets sellers know that you’re a serious buyer if you have been pre-approved for a mortgage. And not having pre-approval can be a deal breaker for some sellers owing to the possible problems with financing that may then come up. Your first step, then, for buying a home in Tampa Bay before the end of 2019 is not looking for a house, but going to your lender for pre-approval.
Rising Interest Rates
In addition, mortgage interest rates are going up – an important consideration for buying a home in Tampa Bay before the end of 2019. Interest rates are expected to climb as high as 5% for 30-year loans. Basically, that means that if you’re considering buying a home, now may be the time to do it before interest rates rise any higher.
Credit Score Still Matters
While options now exist for getting a mortgage loan with less-than-great credit, a good credit score still matters. Typically, a score of 620 is about the minimum that will allow you to get a loan (although a few lenders will consider a score as low as 580). An average score is about 620-680, a good score is around 680–740, and a great score would be over 740. These are the credit-score targets you need to shoot for if buying a home in Tampa Bay before the end of 2019 is your goal.
Bigger Down Payment = Better
Buying a home in Tampa Bay doesn’t necessarily require a down payment of 20% of the purchase price. Today there are multiple options that allow lower-income buyers to get down-payment assistance, with down payments of 3% to 5% possible. The average down payment now is around 10% of the purchase price, so you don’t have to have 20% on hand in cash.
But in the current competitive seller’s market, you will be better off with a down payment closer to 20%. Competition among buyers is keen, so those with more for a down payment are likelier to have the winning bid. In fact, agents are advising their seller clients to go with the buyer who has the largest down payment in hand.
Another change that will affect buying a home in Tampa Bay before the end of 2019 involves speed to closing. This has happened over the past three years or so and is still gaining momentum.
Average application-to-closing times are shrinking – to about 42 days for both purchase and refinance loans throughout much of 2018. That’s a decrease of about three days from 2013. It’s a fast-changing world for home-buyers right now.