People Trying to Buy Houses Are Stressed Right Now

People who want to live the dream of a white, picket fence surrounding a pretty house with a nice yard and a flower garden may be a little stressed out right now. In 2016, mortgage rates were below four percent at the beginning of the year. They stayed at record lows. At the start of 2017, they were hovering above 4.25 percent. On top of that, it is a seller’s market for most of the country right now.

The majority of homebuyers today need to get a mortgage to finance the purchase of a home. It is not like the last housing boom, where money was basically “free.” They have to have a down payment, good credit scores and make enough money to qualify for the loan. While interest rates are a lot lower than they were during the housing boom, it is a fact that houses today are more expensive. Buyers are finding it difficult to pay interest on loans, as well as the principal. In addition, when they are able to put about three percent down on a house—considered a low down payment—they have to pay mortgage insurance. Their income to qualify for a loan today is a lot higher than it was before.

A positive for people who are buying a home now is that in the past half century homebuyers would have been excited to get rates around four percent.

Concern About the Housing Market

In the past few months, housing has been on the upsweep in the country– there were numerous new permits given for construction this year. House prices are higher than they were at their peak in 2006. The peak was only attained because of lax credit, and that made a number of purchases possible after the housing prices skyrocketed beyond what people could actually afford.

In addition, wages are not better than they were in the housing crash of 2007-2009 (Wages increased only for a few industries just recently.)

Causes of Stress in Buying a Home

For many people, home buying is one of the most exciting times in their lives. But, there is a good chance that they can get upset about the process of home buying and instances where it could cause stress. The following are just some of the things to be aware of that may get in the way of the joy of purchasing a home.

Sellers can sometimes be unreasonable.
A home inspection may show that the dream home has many problems.
It is possible the lender will reject a loan.
The real estate agent might not be very good at communicating, which may lead to not keeping you abreast of the many important steps in buying the house.
The title company could find problems, such as an unknown lien.

People Buying Houses are Stressed Right Now: How To Stress Less

How to Make Home Buying Less Stressful

Make sure to know what you want in a home. If you do not have an idea about the things you want in a house, you may be looking at a lot of houses that don’t meet your wishes. Be specific about what you want in order for the agent to show you the appropriate houses, price ranges and community you want for you and your family. For starters, make sure to include the following things: the number of bedrooms and bathrooms, if it is one or two levels, the type of exterior (wood, brick), if you want a basement or a crawl space, the square footage, the type of housing (condo, townhouse or single-family home), the school district if you have children that attend school or if your children will eventually be going to school, and any maintenance that may be needed on the house or the property.

Remember that, even though you want certain thing in a home, there is usually nothing out there that is the “perfect” home. Try to be flexible with what you can, but don’t give in on the things you really want. However, if you really love the house, but it doesn’t have a small amenity that you originally would have liked, can you live without that one small item?

It is to your advantage to get pre-approved for a mortgage prior to bidding on houses. You don’t want to find the house you want and discover later that you are ineligible for financing. It saves a lot of stress to take care of the financial part before you search for the home. In addition, many sellers and real estate agents choose to work with buyers who have already been pre-approved by a mortgage lender.

It is a good idea to listen to the advice of the real estate agent. Your realtor probably knows a lot more than you do about the process of buying a home. If the agent recommends adding some contingencies (conditions you want taken care of before the sale is completed) to an offer—like a repair or that the home has a satisfactory inspection—take the advice. In the long run, it could save you money and stress.