A realistic guide for navigating today's volatile housing market.
With a shifting housing market and sky-high mortgage rates, consumers looking for a home today may find the homebuying process difficult to navigate.
According to KeyBank's 2024 Financial Mobility Survey1, recent and prospective homebuyers are most concerned about three factors: inflation (40%), market competition (36%), and interest rates/mortgage rates (34%). Surprisingly, just 37% of these respondents had set up a budget and financial plan to save for their home purchase.
Regardless of the current economic conditions, there is hope for reaching the dream of home ownership in any market – and there are numerous steps and resources available to assist you in your endeavour.
Tip 1: Create a dedicated savings account for your down payment
According to KeyBank's poll, putting money aside in a dedicated savings account is one of the first steps in the right approach and the most prevalent savings method (43%) among those looking to buy a property.These money can be used to make a down payment at the time of purchase, which typically ranges from 5% to 20% of the entire loan amount. Waiting to buy a property until you've saved more — beyond your goal amount — will assist ensure you have emergency money on hand for any unexpected expenses.
According to the survey, half of new homeowners (51%) anticipate to spend more of their savings next year than those looking to buy a home (45%) or who do not own a home (35%). Setting aside extra money will help you prepare for any unexpected bills.
These suggestions will make it easier to buy the home of your dreams.
Tip 2: Check your credit score
When applying for a mortgage, your credit score will determine whether you are approved. It also influences your interest rate.
Among individuals who completed the KeyBank 2024 Financial Mobility poll and are in the market for a home or have acquired one in the recent year, one-third (34%) cited interest and mortgage interest rates as a major factor affecting their purchasing decision.
During your home-buying journey, try not to close any active credit cards or open new cards or lines of credit, as this can harm your credit score. A few years before looking for a home, you can start developing credit by opening and using a credit card, such as the Key Secured Credit Card2. You should also ensure that your payments are paid on time and that your credit card balances are minimal.
It is critical to dispute any potential inaccuracies on your credit record before applying for a mortgage.
Before looking for a home, check your credit score.
Tip 3: Establish a relationship with a mortgage loan officer
Meeting with a mortgage loan officer can help you examine your overall financial situation and provide a tailored strategy to finding the proper mortgage. In fact, only 12% of KeyBank survey respondents who are looking for a home or have purchased one in the recent year stated they did not or will not engage with a mortgage loan officer.
Mortgage loan officers can also assist you in budgeting for additional expenditures associated with the purchase of a home, such as moving and renovation charges, homeowner's insurance, interest, taxes, and more.
If you aren't quite ready to meet with a mortgage loan officer, consider using internet tools like mortgage calculators to learn more about what you'll need to buy a home.
Consult with a professional mortgage lending officer to assist you get the best mortgage for your situation.
Tip 4: Identify ways to reduce out-of-pocket costs
While the alternatives vary, many states and financial institutions provide assistance programmes to first-time homebuyers and other borrowers. Depending on your income and region, you may also be eligible for special purpose credit programs3, which include grants, supplementary loans, interest rate concessions, and other financial assistance for closing expenses and fees associated with purchasing a new home.
KeyBank, for example, offers three Special Purpose Credit Programmes to assist borrowers with qualifying properties in eligible communities, including but not limited to the Neighbours First Credit, which provides up to $5,000 towards closing and other costs4 associated with a new home for qualifying properties, and the Key Opportunities Home Equity Loan5, which assists with home-improvement costs following your big purchase.
You may learn more about programmes like these online or contact your bank to have access to these resources.
Sustainable homeownership is a wealth-building strategy that can help families and communities prosper. Visit the KeyBank Mortgage Centre for more information and resources on homebuying, homeownership, and other financial matters, or contact a Key Mortgage banker.
About KeyCorp.KeyCorp's roots go back over 200 years to Albany, New York. Key, headquartered in Cleveland, Ohio, is one of the nation's major bank-based financial services organisations, with roughly $188 billion in assets as of December 31, 2023.
KeyBank National Association, which operates roughly 1,000 branches and 1,200 ATMs, offers deposit, lending, cash management, and investment services to individuals and businesses in 15 states. Under the KeyBanc Capital Markets brand, Key offers a wide range of sophisticated corporate and investment banking services to middle market companies in select industries across the United States, including merger and acquisition advice, public and private debt and equity, syndications, and derivatives. For additional information, go to key.com. KeyBank is an FDIC member.
NOTICE: This is not a pledge to lend or extend credit. Certain conditions and restrictions may apply. The information and offers are subject to change without notice. All financing products require collateral and/or credit approval. Not all loans or products are accessible in each state.
1. Schmidt Market Research performed the KeyBank 2024 Financial Mobility Survey online. The poll was performed in September 2023 by 1,000 Americans aged 18 to 70 who had single or joint responsibility for home financial decisions and owned a checking or savings account. The poll examined respondents about their financial attitudes, comprehension, awareness, and behaviours from the previous year.
2. The Secured Credit Card can be opened only once money have been properly deposited in a wholly owned Key Active Saver account. The Key Secured Credit Card requires credit approval. The credit card must be secured by a deposit of at least $300 in a Key Active Saver account (up to $5,000). The Key Active Saver account must be funded within 30 days of its opening. The monthly maintenance service price on the Key Active Saver account will be waived for Key Secured Credit Card customers. The monthly maintenance service charge waiver is only applicable as long as the Key Secured Credit Card is open. If you transition to an unsecured credit card or close your Key Secured Credit Card account, the Key Active Saver monthly maintenance service charge of $4.00 may apply, unless you maintain a KeyBank consumer checking account (including the KeyBank Hassle-Free Account).
3.unique Purpose Credit Programmes are primarily designed to satisfy unique social needs or the requirements of economically disadvantaged people by granting credit to people who would otherwise be denied credit or get it on less favourable terms under certain circumstances. See 15 U.S.C. § 1691(c)(1)–(3) and 12 C.F.R. § 1002.8(a).
4. Only available for principal residence first lien purchases. Property must be in a qualified community within KeyBank's retail footprint, or in Florida. KeyBank determines eligible communities, which may change without notice. Additional terms and restrictions may apply. Please contact us for more information.
5. Key Opportunities The Home Equity Loan programme offers a permanent rate reduction that is reflected in the interest rate on the Promissory Note. The interest rate discount cannot be combined with any other promotional deals.
To apply for a home equity loan, you must:
- Be 18 years of age or older
- Live within the following states: AK, CO, CT, ID, IN, MA, ME, MI, NY, OH, OR, PA, UT, VT, or WA
- Agree to provide additional personal and business information, if requested, such as tax returns and financial statements
- Certify that all information submitted in the application is true and correct
- Authorize the bank and or a credit bureau to investigate the information on the application
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