Today’s real estate market can be a pain. With rising interest rates in most major U.S. cities, eager buyers are left feeling defeated in trying to find their next dream home. Dallas-based realtor and owner of Prime One Lending Group, Benaisha Poole Watson, has followed market trends closely throughout her career. She’s even found several real estate tips that can be beneficial to all aspiring home buyers—especially those in Black and Brown communities.
Real estate guru Benaisha Poole Watson. Image: Laterras Whitfield.
According to the Mortgage Bankers Association, home interest rates are expected to average 6.2 percent in the first quarter of 2023, while Fannie Mae predicts an average rate of 6.5 percent, which is nearly double that of rates just years ago.
EBONY spoke with Poole Watson to get a few of her trusted real estate tips to help you as you navigate the market this year, and beyond.
Don’t Make Any Financial Changes or You Can Kill Your Deal
Whether it’s opening a new account, closing an old account or changing your job—if you do any of these things it can cause your deal to completely fall apart. Especially if you are already close to the maximum threshold for your loan program’s debt-to-income ratio. Debt ratio for FHA loan is generally 50-54% and for a Conventional loan, it is is generally 40-43%.
“Most people also tend to think that closing an account will increase their credit score, when it often tends to do the opposite,” Poole Watson says. “Hold off until after you’ve closed on your home loan to make any additional financial changes.”
Know What Is on Your Credit Report
Entry into homeownership generally requires a 620 or above credit score. There are programs, such as FHA, that start as low as 580 and are based on lender requirements. The higher your credit score, typically 740 and above, the better your rates will be. Access this soft pull of your credit report at no charge one time a year at www.annualcreditreport.com.
“Getting this peek at your report allows you to remove any previously added fraud blocks, credit freezes and dispute duplicate reporting or discrepancies you may not have been aware of,” says the real estate guru. “A lender cannot access your credit information with fraud blocks and freezes. Ensure they are removed to avoid delays.”
Don’t Max Your Budget
Just because you were approved for a $600,000 mortgage doesn’t mean you should buy a $600,000 home. You will need to consider unexpected repairs or hospital bills, shares Poole Watson. “This may be the first time that you are responsible for water bills. Life will happen, and you don’t want to be in a place where it could cost your home.”
Don’t Be Afraid to Hire Your Own Inspector
Generally speaking, the buyer will be able to choose their own home inspector, but in some states such as New York, the lenders may give you a list to choose from. Although it is an out-of-pocket expense, don’t hesitate to bring in your own inspector, even if a bank provides one.
“Horror stories happen every day when people discover their electrical isn’t to code or tiles being tapped on,” the Air Force vet shares as one of her top real estate tips. “Remember, inspectors the bank recommends are for their benefit, and not always yours.”
Be Neighborly
In some instances, neighbors can make or break your home purchase. Drive by a couple times at different times to get an idea of what the neighborhood is like during the day, the afternoon and the evening. Talk to the elder neighbors and let them know that you were thinking of moving in; they will give you the best insight. Doing this before putting in an offer can save you time and stress down the line.
