The Utah housing market has been skyrocketing this year, with homes in some well-sought after cities provoking bidding wars in hot neighborhoods. For home buyers, this may mean that they are more likely to end up paying more than they are expecting when they start looking for the home of their dreams.
Home buyers should start preparing for their search by finding out what they can afford before making a list of what they want. Start by crunching the numbers with a qualified mortgage professional and determine which monthly payment can be safely worked into your budget.
Once you have determined a budget that is comfortable for your finances, it is important to stay within that budget. With market prices higher than normal, this could mean that you may end up buying a home that could lose some value when the market declines. This makes investing in a house you can afford vital as you will have to be able to keep up with your mortgage payments for a while to breakeven. It is also wise to increase your down payment with a minimum of 15% - but ideally 25%. This will help provide you with some equity in the event the market sees a quick downturn in the next few years.
A seller's market can also mean that a buyer may have to give up some items from their wish list to be able to afford a home in a nice neighborhood. It is always easier to renovate a home or add on later when you can afford it, but finding the right neighborhood can help your home hold its value. Start with a needs list and limit your must-haves.
Don't be afraid to broaden your search. Most home buyers cast their shopping net in areas they are familiar with. By doing this, you might be missing some great opportunities that are in your budget in a neighborhood that is good, but you might not know as well. Connect yourself with an experienced real estate agent who is familiar with the area and let them clue you in on some neighborhoods that may turn out to be hidden gems.
A final piece of advice for Utah home buyers is, be patient. While renting or staying in your current residence is not ideal, if it is an option it might be the best choice to stay where you are until you can save up a sizable payment and find the right home.
Source: Go Banking Rates
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