How to navigate home buying and renovations in a fluctuating market
Your home is a haven for today — and an investment for tomorrow. Whether you’re considering how to buy a house or other property, or looking into a renovation, you’ll need a thoughtful approach — especially during a time of rising interest rates.
Buying? Determine what you can afford
Before you begin to browse those for-sale listings, keep a few house-buying tips in mind.
Review your monthly income and expenses
Check mortgage rates
Get an understanding of down payment and closing costs
What’s next? Pave the way for a smooth loan approval process
In a fast-moving market, it can pay to get preapproved. Also, work on bolstering your credit score, as a higher number can help you get a lower interest rate.
87% of buyers financed their homesFootnote 1
86% of buyers viewed a home purchase as a good investmentFootnote 2
Remodeling? Create a realistic budget
A revamp can give a growing family more room to roam — and potentially bolster your resale value. The secret to success: sticking with the numbers you set.
25%
Increase in homeowner spending for improvements from 2020 to 2021.Footnote 3
Considering financing your renovation? Choose wisely
You may need to borrow if you don’t have enough money on hand. Keep rising interest rates in mind as you explore your options.
35% of homeowners used credit cards to help finance renovation projectsFootnote 4
14% used a secured home loanFootnote 5
Interested in a second home?
A second home can provide a much-needed respite, as well as an idyllic place to work remotely. In addition to the home’s price, factor in repairs, taxes, and insurance. Keep in mind that inflation and rising interest rates can make these bills bigger.
In early 2022, demand for second homes was up
87%
over pre-pandemic levels.Footnote 6
Would that second home be an investment property?
Real estate, such as a rental property, can bring in extra revenue. Yet managing this type of asset is much tougher than most think. Plan ahead for the time and extra money it will likely take.
Most lenders will require a credit score of at least 700 and a down payment of 15 – 25% for an investment property.Footnote 7
Understanding the key considerations for buying a second home.Learn more
Sources:
1. National Association of Realtors.
2. National Association of Realtors.
3. Angi.
4. Houzz.
5. Houzz.
6. Redfin.
7. Bankrate.