Is now a good time to buy a house in Minnesota? Despite a challenging market, the year 2022 ushers in some upsides for buyers. Bidding wars have cooled and there are signs that sellers are willing to come down from peak pricing, both of which ease the pressure on buyers. Yet, mortgage rates have hiked by 2.5% since the start of the year, creating another challenge for would-be homeowners.
Whether you’re in this for the first time or looking to make a change, it’s not the easiest time to buy a house. But here are a few tips and considerations that can pave the path to the house of your dreams.
Don't rush the process
Now that the frenzy has died back a bit, there's no need to rush a home purchase. As the market responds to the current happenings, it’s worth taking a few extra weeks to see how things play out. With less competition at the bidding table, you’ll have time for a proper search. Who knows, maybe the pricing will continue moving in the right direction.
Consider selling before you buy
Not everyone has this option. But if you have somewhere to stay for a few months, it can be smart to sell your current home before you make an offer on a new place. That way, you’ll never face the stress of working against the clock. Ask a friend or family member with extra space if you can room with them for a few months (bonus if they have a place at the lake you can lease), and put your furnishings in storage. You’ll love having the extra time and a leisurely pace to look for the right opportunity.
Work with a real estate professional
We understand the appeal of the DIY route. Because who wouldn’t want to save on commissions and fees? But unless you’re already savvy in local real estate, you’re better off with a Realtor because they’ll have the pulse on the rapidly changing local market. With the guidance of a seasoned pro, you can make an offer and feel confident that you have a shot of getting what you want, whether you want to negotiate for a lower price or add a few contingencies. While you’d never want to pay more than you should, the last thing you want to do is lowball the seller, which is where a realtor can be a huge help.
Keep refinancing as a future option
Market rates do fluctuate. If today’s interest rates are more than you hoped or planned for, refinancing to lower your monthly payment could be an option later. Should they decrease by 1% or more in the next few years, then refinancing will be worth your while. Even better, if your income can handle it you can look at refinancing into a 20- or 15-year mortgage, which often comes with even lower rates. In the meantime, prioritize keeping a clean credit record by making on-time payments.
Don’t sink your entire savings into the down payment
Tempting as it is to lower the loan balance, you’ll still want cash on hand once you move into your new digs. Moving often comes with higher expenses. You’ll want to make a few upgrades and purchase some supplies and gear for the home and yard. And, of course, you want to be ready for the unexpected, like medical bills or temporary unemployment. Having enough cash to cover a few months’ worth of house payments can be a life-saver in a crisis.
Work with a community banker
A community bank is your best bet when getting a mortgage. While they have many of the same convenient products as a big bank, you can expect stellar service and a personalized approach for your loan. While big lenders tend to focus corporate clients, the people who live and work in our community are our focus. If you’re looking for a mortgage that works with your finances, Minnwest Bank is where you want to start.
Make Minnwest Bank your mortgage lender of choice!
Minnwest Bank is there to help you achieve your dreams. Our community banking approach is designed to make mortgage loans more streamlined for borrowers like you.
- Our helpful bankers take time to educate you and answer all your questions, so you can feel confident in the process.
- You'll always work with the same lender from start to finish. All servicing and processing stay in the same location.
- As a community bank, we offer flexible terms and customized loan packages at highly competitive rates. With our level of service, you get tremendous value.