According to data from the Greater Albuquerque Association of Realtors, the average median price for a home in the metro area recently broke the $300,000 threshold for the first time in history. Additionally, the inventory of homes on the market decreased by almost 49%. However, mortgage rates are near historic lows, giving shoppers more buying power. Is now the time to purchase a home to call your own?
Our expert mortgage team here at Nusenda has gathered some tips and great advice to help maneuver through this unique market and to streamline the process.
- Get Your Paperwork Together: Like buying a car or signing up for a credit card, when applying for a mortgage, you’ll be asked to provide a lot of paperwork to prove your income, credit, and other information that financial institutions need to qualify you for a loan. For example, pay stubs, bank statements, tax returns, w-2 forms, a list of debt, a letter from your landlord verifying rent, 401(k) and other investment reports, work history, and bankruptcies are all things you’ll be asked to show when applying. It’s best to gather this information first, so getting prequalified will be easier.
- Affordability: In most of New Mexico, there is currently a housing shortage, which is driving up prices. A home you could have considered within your budget a year ago may now be out of reach. Yet, lower mortgage interest rates (based on your credit) could help narrow the pricing gap. Most important — get prequalified for a mortgage. It will give you an idea of what you can afford — and help your real estate agent find homes within your budget. Remember — when the market is hot, houses are often sold for more than the asking price. Be sure your bid doesn’t go over what your prequalification states you can afford to ease any disappointment. Schedule an appointment today with one of our loan officers to get prequalified.
- Assemble Your Team: Buying a home takes teamwork! From real estate agents to title companies, home inspectors, and appraisers to your mortgage lender, it’s essential to have a team that you trust, and that you feel is listening to your needs and concerns. Good people know good people! Many people in the housing industry know each other and have built strong relationships built through years of working together. Ask for referrals, but don’t be afraid to find a team is that is just right for you. Working with a local lender can help you avoid the pitfalls of out-of-state or internet lenders who do not understand our market.
- Inventory: It’s fun to flip through the pages of a homebuying magazine or visit one of the dozens of websites that display houses for sale in your area. But don’t think that the price you see is the price you’ll get. In New Mexico, home value estimates are notoriously bad because, under state law, final sales prices don’t have to be in the public record. Your real estate agent has access to actual sales prices of recently sold homes similar to what you’re seeking in the neighborhood where you want to live. They will help you get a range of fair market values for the area you want to call home.
- Be Prepared to Move Fast: Did you see a “For Sale” sign in front of your perfect house? Was there a home you saw online that would be a great fit for your lifestyle? In today’s market, those houses will probably be sold in a blink of an eye. Unless you have your preapproval ready and your team assembled and ready to act, the homes you see on the market today will be quickly gone. If your real estate agent finds a home that works for you (and is within your budget), it’s time to move! Your bid might be one of many presented to the sellers, and it’s easy to get emotionally attached. Don’t be disappointed if your offer isn’t selected. Stay aware, and have your awesome team help you find the next potential home. It’s also important to remember that it’s not just a shortage of houses — it’s taking approximately twice as long, as usual, to “close” — or finish all the paperwork — on a home because of a shortage of appraisers, inspectors, title company workers, and more. Be sure to factor in that time when ending a lease agreement or if you need to sell your current home to move into a new one.
While buying a home may seem like an uphill climb, having trusted, experienced people who know the market can help you on your journey. You can receive expertise and guidance through resources like Nusenda Credit Union’s monthly homebuyer workshops. We also have a great network that will help you along the way. And because we care more about our community and fellow New Mexicans than we do about profits, consider us your trusted financial advisors. You can even bring in a prequalification from another lender — and we’ll let you know if you’re getting a great deal or if we can make it better! Plus, if you become a Nusenda member, your mortgage will be processed and approved locally. We are eager to help you down the path to your dream home!