Routing # 256078446
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Pros and Cons of Buying a Home in the Spring
What you'll learn: Factors that may influence home buying decisions during spring season.
EXPECTED READ TIME: 5 MINUTES
January 28, 2022
For many homebuyers, the spring real estate market is a natural time to purchase a home. After a long winter spent indoors, many buyers may be ready to trade in their current space for one that is larger, smaller, or simply different. Learn more about the pros and cons of buying a home in the spring and find out how to effectively navigate the process.
Why Buy a Home in the Spring?
For many homebuyers, spring is the time of renewal and that includes the renewal of their living space. In many of the largest US markets, spring is the most active season for real estate, coming on the heels of a long cold winter.
In warm weather markets, spring may be the time when snowbirds are contemplating returning to their northern hometowns. This may drive them to explore the real estate market locally and purchase a second home or prepare to relocate permanently.
What are Your Goals for Your Home Purchase?
Before you can purchase your home, you need to define your goals for the process and its outcome. Some possible goals may be the following:
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Getting out of a current home that has become too small for your family
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Finding more outdoor space or a different style of home
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Downsizing in preparation for retirement or for greater affordability
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Facilitating multi-generational living for elderly family members
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Purchasing as an investment or for greater housing stability
Clarifying and defining your goals, then communicating them to your trusted real estate professional and mortgage lender, ensures that you make better decisions throughout the purchase process.
Plan Ahead for the Home Financing Process
If you are looking ahead to a home purchase, you will need to begin preparing for the finance process well ahead of time. This will give you a chance to evaluate your own financial fitness and to gather the information you will need before you find your dream home.
Here are some of the things you need to consider:
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What are your financial goals from your home purchase? Are you looking to add value to an undervalued property? Incorporate rental space into your purchase? These can affect the type of mortgage you qualify for and the amount for which you will be approved.
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Is your income based solely on your salary or are there other sources of income at your disposal? How can you document your income adequately, especially if you are self-employed?
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How much money do you have available for your earnest money deposit (EMD), down payment, and closing costs? What reserves will you need to show when you apply for your loan?
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What is your lifestyle like and how does that affect your budget? Should you buy at the top of your budget or would you prefer to have additional disposable income for travel or social events?
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How can you show that you are pre-approved for a loan, making your offer more competitive? How long can you lock in a favorable interest rate?
Advantages of Buying a Home in the Spring
In most markets, the biggest advantage of buying a home in the spring is the inventory. Because so many home sellers wait until after the holidays and the cold weather passes to put their homes on the market, you will often have your pick of the area’s best listings. In addition, you may have more opportunities to visit open houses and see what is available on warm, pleasant spring weekends.
Disadvantages of Buying a Home in the Spring
The flip side of the active spring market is that you will face greater competition from other buyers in your area. Since spring is such a popular time of the year to purchase, you may find yourself in multiple offer situations against other well-qualified buyers. In addition, homeowners may be less likely to negotiate in the spring since they may be able to anticipate other offers coming their way during an active market.
Always Expect the Unexpected
The most important thing to remember about a home purchase at any time of the year is that each one is different, with its own unique challenges. By working together with your real estate broker and mortgage lender and communicating consistently, you will be able to meet those challenges head-on and enjoy a successful springtime purchase process.
Buying a home in spring is the goal for many. Get started now and you could find yourself settled in your new space when the first April showers fall.
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What are the Steps to Buying a Home? Part 1
If you are a first-time homebuyer, there is a lot to think about. PenFed Credit Union takes you through the steps of what you need to know before buying a home.
Home Buying Steps
Mortgage Products
Disclosures
1Conventional Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.0 discount point, which equals 1.0 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
2FHA Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.0 discount point, which equals 1.0 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 96.5%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
3VA Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 1.125 discount point, which equals 1.125 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $450,000; loan-to-value ratio of 95%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of $995.
4Jumbo Loans
Except for holidays, rates are updated Monday through Friday at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on 0.625 discount point, which equals 0.625 percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, non-conforming, fixed-rate loan. Loan amount of $1,009,000; loan-to-value ratio of 70%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.
Rates quoted require a loan origination fee of 1%; not to exceed $1,995. Speak to a PenFed Mortgage Loan Officer for additional details.
Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Advance Period. During your Advance Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.
Routing #256078446
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