Super Bowl LVII kicks off the 2023 homebuying season – NerdWallet

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Many neighborhoods are bound to be filled with cars on February 12, as families, friends and fans gather to watch the Super Bowl. But cars might be parked around the block the next day for a completely different reason — open houses.

Trading in foam fingers for rubber cleaning gloves, landlords across the country will be scrambling to list their homes for sale. The day after the Super Bowl is considered by many in the industry to be the unofficial start of home buying season.

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Consider a market like Massachusetts, which has a strong sports culture and cold winter months. Kristin Coppola of South Shore Sotheby’s International Realty in Duxbury, Massachusetts, explicitly recommends that sellers hold off on listings until after the big game. “It’s the New England mentality,” she says, as locals are in “hibernation” while they focus on football season. After the game is over, however, all bets are off. “It’s like a madhouse.”

As the 2023 NFL season nears its end and home buying season begins, use this guide to shop like a pro.

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Focus on cost and affordability

Thanks to interest rates that are higher than they were last year, home buyers are getting less for their dollar. Competition may not be as fierce as it was during the pandemic, but many home buyers are now struggling with a tight budget. Those financial constraints limit the number of homes buyers can purchase in an already shallow pool of inventory.

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You must understand the full cost of homeownership, as well as how to position yourself as an attractive borrower to lenders and sellers.

A strong borrower profile = better rates

Before you start browsing online listings, take a long look at your finances.

A good place to start is your credit score, as lenders typically want to see a score of at least 620. The best mortgage rates are reserved for borrowers with scores of 740 or higher. A lower rate will free up more of your monthly payment to go toward principal, which means you can afford a home with a higher sticker price.

A quick way to help your credit score is to request a free credit report and dispute any errors. Credit bureaus have up to 45 days to investigate and respond to your claims.

You’ll also want to consider your debt-to-income ratio, as it’s one of the key elements lenders consider when reviewing your loan application. Borrowers whose total debt exceeds 36% of their monthly income will find it harder to qualify for the best rates.

develop a realistic budget

According to the National Association of Realtors, the median home purchase price in December 2022 was $366,900. Beyond the price of the home, you’ll want to factor in the additional costs of home ownership. These include property taxes, utilities and homeowner’s insurance, as well as general costs of maintaining the home, such as upgrading appliances or replacing the water heater. If you’re shopping in a neighborhood with a homeowners association, keep those fees in mind as well. You will also need to account for closing costs, which typically range from 2% to 6% of the loan amount.

Don’t stretch your budget beyond what you can safely afford; Instead, turn to your list of criteria and start making cuts where possible. That ideal 36% debt-to-income ratio includes your home loan. Calculating your current monthly debt can give you an idea of ​​how much of your remaining income you can comfortably use for mortgage payments.

get pre approved for a mortgage

Buyers “need to be prepared to hit the ground running” to take full advantage of the seasonal spike in available homes, says Coppola. New listings on its market go down by Memorial Day, when locals head to the beach. One way to prepare is to start reaching out to lenders to get pre-approved for a mortgage.

Mortgage pre-approval will benefit you in many ways during your home search. Gives you peace of mind by confirming that you qualify for the loan; This can help inform your budget; And, when you’re ready to make an offer, it will demonstrate that you’re serious and motivated to buy.

“A pre-approval letter sends a clear message to sellers that these are strong buyers,” says Jessica Schenkel of Sagan Harborside Sotheby’s International Realty in Swampscott, Massachusetts.

Shop around and apply for mortgage pre-approval from multiple lenders. This allows you to compare rate offers as well as any associated fees.

Build your winning team

“An important play is finding a Realtor who will represent your best interests in one of the largest and most important purchases you will make,” says Schenkel. “Not everyone is going to be a perfect fit.” Your agent will be an informed insider resource who can help you understand your particular market, including the challenges and competition it may face and where to look for homes within your budget.

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