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May 30th, 2012

Preparing for your home purchase

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mortgage appThere are some obvious do’s and don’ts when it comes to homebuying:

  • Do: Shop around for the best mortgage rate
  • Don’t: Give out your social security number to every single person who asks for it
  • Do: Get preapproval
  • Don’t: Sign or agree to anything you haven’t read or are uncomfortable with

But preparing for a home purchase needs to go beyond just the basics. Preparation takes months, even a year. The good news is that mortgage rates have hovered over historically-low territory for quite a long time now. A long stretch of stable-to-falling rates allows potential homebuyers the time needed to research, plan and execute a transaction to buy a home without concern of a spike in rates, which can upset deals at a moment’s notice.

According to HSH.com’s Weekly Mortgage Rates Radar, rates on the two most popular types or mortgages barely moved off record lows. The average rate for conforming 30-year fixed-rate mortgages rose by a single basis point (0.01 percent) to 3.88 percent, just above record lows. Conforming 5/1 hybrid ARM rates increased by 2 basis points, closing the Wednesday-to-Tuesday wraparound weekly survey at an average of 2.88 percent.

Read: Preparing to Buy: Estimating the Costs of Homeownership

“Record and near-record low mortgage rates are providing important support for the housing market,” says Keith Gumbinger, vice president of HSH.com. “Both existing and new home sales are starting to move upward. However, buying a home doesn’t happen overnight, and successful transactions begin many months before they came to fruition.”

Unlike refinancing, Gumbinger explains, buying a home requires much more time to plan and prepare before move-in day arrives. For potential homebuyers, there is work to be done as far in advance as one year if they hope to have a trouble-free transaction.

To help first-time homebuyers every step of the way, HSH.com has just introduced the First-Time Homebuyer Timeline, a 12-month planning guide for the process.

“The decision to buy a home starts a number of processes rolling, and the clock starts ticking,” notes Gumbinger. “Knowing what steps to take today and what comes next in line will alleviate stress and confusion. HSH.com’s new tool provides a simple way to see what needs to be accomplished and when, helping to make the process smoother and easier. Mortgage rates will be low for a while yet to come, but not forever, and the time to start planning a home purchase is now.”

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4 Responses to “Preparing for your home purchase”

  1. Ohio FHA Mortgage Says: May 30th, 2012 at 1:17 pm

    While I agree that the homebuying process takes preparation, a 12 month time frame seems a little long. Unless there are credit issues that need to be resolved. Alot can change in that 12 months that would negate research you had already done, causing you to start over.

    But the overall premise or preparation is good. Too many homebuyers want to jump in. Just talked to another one this morning that has an offer in, and hadn’t talked to anyone regarding a mortgage yet. Talk about putting the cart before the horse.

  2. Tim Manni Says: May 31st, 2012 at 5:05 pm

    Thanks for the comment!

  3. Diane Says: May 31st, 2012 at 8:13 pm

    Ohio, for those of us who have bought & sold homes before & know what we qualify for, why would you think preapproval is necessary? I for one don’t see a real reason for it unless the buyer doesn’t think he can get an approval. For us, with an 800 credit score, more than 20% down payment, long credit history, low debt- it’s a shoe in. We did get preapproved but having been an accountant for over 30 years I knew there would not be a problem.

  4. How To Buy A House With Bad Credit | Best Home Owner Solutions Says: June 18th, 2012 at 7:30 pm

    [...] Preparing for your home purchase HSH Financial Publishers blog [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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