by Jaclyn Youhana Garver
With the itch to spring clean comes the itch for home improvements: Maybe it’s finally time to update that old oven, or maybe the bathroom is in desperate need for new tile. Maybe you’ve been putting off new windows or updating the flooring in the family room.
“When homeowners start thinking through ideas like that, they start to think: ‘Maybe it’s time for a change instead of doing all these things to the house,’” says Lisa Keirns, a mortgage banker at STAR Financial Bank.
And that’s when the bank starts to see an uptick in customers looking for pre-approval, which confirm a homebuyer’s credit before signing a housing contract.
To provide a future homebuyer preapproval, Keirns reviews a variety of customer paperwork and information, including pay stubs, tax documents, income, current monthly payments, employment history and assets available for a mortgage down payment. She helps customers determine an ideal down payment based on their comfort level and what they can afford. She discusses customers’ goals and helps them shop within their means.
“You don’t want to go through making an offer on a home only to realize that you can’t really afford it,” Keirns says.
Undergoing this process, which also covers property taxes and homeowners insurance, shows sellers that a customer is a serious buyer, which is especially helpful in the current housing market.
“Toward the beginning of the pandemic, the local housing marketing came to a bit of a halt, but things have picked back up,” Keirns says. Currently in the area, there are lots of buyers but not so many houses—a trend that mirrors national numbers.
Across the country, home sales and prices have “hit decades-plus highs,” according to Realtor.com.
“We expect housing’s winning streak to continue in 2021, as seasonal trends normalize and some of the frenzied momentum fades thanks to fresh affordability challenges,” the website reports.
According to Realtor.com’s 2021 housing forecast, the strong demand for homes will lead to a 7% increase in home sales compared to 2020.
“As vaccines for the coronavirus become broadly available to the public, and economic growth reflects the resumption of more normal patterns of consumer spending, home sales gain even more in the second half of the year,” according to the forecast.
“With fewer available houses in the market, undergoing preapproval can help a homebuyer stand out in a crowded market,” Keirns says. It can also give a buyer flexibility within negotiations because sellers may be more willing to compromise if they know a buyer is preapproved and prepared to move forward with a housing purchase.
“Preapproval lasts for four months,” Keirns says, “though reapplying is simple, since she would already have much of the information required, such as tax documents and employment history.
“It really gives buyers peace of mind, knowing they’re going into the process understanding what they’re getting into,” she says.
STAR Financial Bank, starfinancial.com