Buying a home in 2023 might seem like an uphill battle after the market has been so hot for so long. Worries about finding an available property in Lake Placid, securing financing and winning the competitive bidding process are concerns felt by many potential buyers going into 2023. Adirondack Premier Properties has guided many buyers to success in the recent market, and our team looks forward to helping more buyers close their deals in 2023.
Contributing to current market challenges, inflation, home prices and interest rates trended higher in 2022 than they have in several years. While ascending trends in these three areas have contributed recently to Lake Placid’s housing market starting to ease and lower inventory, we continue to be confident at Adirondack Premier Properties that the local housing market will remain strong. If you are interested in buying a Lake Placid home in 2023, now is the time to plan your path to finding the right property and closing your deal. The best way to start preparing is to look towards your finances and specifically, to take steps to improve your buying power.
Buying a Home in 2023 – Boost Your Buying Power
When starting the search for a new home, it can be tempting to focus on the excitement of finding and visiting attractive properties in your area of interest. However, it is important to pause at the beginning of the process to shift your attention to the less exciting area of your finances. Ultimately, when you do find your dream property, doing some leg work ahead of time in the area of financial organization and loan research will increase your chances of successfully sealing your deal for buying a home in 2023.
TheMortgageReports.com recommends talking to a mortgage lender as soon as you begin considering buying a new home, even if you feel you are not ready to buy until later in the calendar year. A qualified mortgage lender can “review all aspects of your financial picture” and help you find resources for a down payment. In addition, a mortgage professional can advise you on steps to take to help raise your credit score. A higher credit score can improve your future borrowing rate.
Another important step a mortgage broker can assist with is advising ways to reduce existing debt without triggering costly inquiries into your credit history. Most importantly, a trusted mortgage professional can help you understand the differences between conventional (Fannie Mae, Freddie Mac) and government-guaranteed (FHA, VA, USDA) loan programs. When buying a house in 2023, choosing the right loan at the outset will make it easier to work towards qualifying for the most favorable terms.
A mortgage lender is also capable of providing you with a pre-qualification letter that many agencies in the Lake Placid region will request and require before showing you homes. This pre-qualification letter informs the real estate agent, as well as the buyer, how much the buyer is able to borrow to reach their goal of buying a home in 2023. If the buyer finds that this number is not providing the buying power they hoped for, it’s time to put an eye back towards finances. Strategies like saving more money while paying off debts will help decrease your debt-to-income ratio and increase your credit score and potential buying power.
As you make your game plan for attacking old debts, begin with paying off the least expensive credit card balances first to impact your credit scores in a positive direction. Don’t close any accounts, or incur any new debt. Keep your revolving loan balances to 30% or less of your credit limits. Remember that your credit score and debt-to-income ratios are the most influential points in the formulas used to calculate the amount you are approved to borrow for a mortgage. The higher the increases in your credit score, the more loan options become available to you.
In planning your financial strategy for buying a home in 2023, your final goal for the near term should be to save as much as possible toward a down payment and closing costs. For VA or USDA loans, no down payment is required. For other loans, you’ll need to put down at least 3.5% of the purchase price of the home you plan to buy as a down payment.
Also, be sure to plan ahead for additional closing cost expenses. When you buy a home in 2023, expect additional expenses to include lawyer fees, inspections, and document fees from the state. Closing cost fees can typically be almost as much as the down payment on a home purchase, so plan on saving more than what you think you will need. Your mortgage lender can give you an estimate of closing costs, but this number could vary. The type of loan taken or additional paperwork required can increase closing costs.
To wrap up, we are optimistic about the current direction of the Lake Placid housing market. Successfully buying a house in 2023 is most certainly an attainable goal, especially if you work with experienced agents like those on our Adirondack Premier Properties team. Taking some of the advice above will also increase your chance of success. To review, be sure to meet with your mortgage broker as early in the process as possible and take whatever steps you can to reduce your debt-to-income ratio and increase your buying power.
This is your year. We look forward to helping your dream of buying a home in 2023 come true.