The New Year has given first-time homebuyers something to celebrate: the opportunity to enter the housing market. Interest rates are still hovering around record lows, so there’s some time left to snag a great deal. If you’re planning on taking the plunge into homeownership in 2016, here are some key points to keep in mind. Home Prices Are Still Rising, but at a Slower Pace. Home prices have been on a steady upward climb over the past few years but are projected to increase by just 2.6% over the next year, according to Zillow. While that represents a slowdown from last year, values are still rising at a faster pace than wages; therefore, some buyers may be shut out of the market if they wait too long to purchase. Mortgage Rates May Go Up. The Federal Reserve finally announced a rate hike at the end of 2015 – but there’s no need to panic. Making a buying decision while mortgage rates are still near historic lows will make the most of your purchasing power.’ FHA Loans Will Be Cheaper. FHA loans are a popular choice among first-time homebuyers because they make it possible to get a mortgage with as little as 3.5% down and a minimum credit score of 580. Although this type of loan requires that the buyer pay an annual mortgage insurance premium (and an upfront mortgage insurance premium) on top of their regular loan payment, the good news for 2016 is that the cost of the premiums is coming down from 1.35% to 0.85% – which increases how much home you can afford. But Getting an FHA Loan May Be More Difficult. New FHA guidelines for lenders may affect which buyers qualify for a loan. Some of the things covered in the updated rules include new documentation rules for gifted down payments and changes to the treatment of student loans when calculating debt-to-income ratios. Our Preferred Lender will walk you through the mortgage maze, with no obligation. Buying Will Be a Better Deal Than Renting in Many Areas. The trend toward ever-increasing rental rates is expected to continue into 2016 and, according to RealtyTrac, owning a home will be more affordable than renting in 58% of all U.S. housing markets. Higher rents tend to push more buyers into the market, causing increased competition for available homes, so entering the market now may be the smart move. A Final Word: Preparation is Key Even if you’re planning to postpone buying a home until later in the year, it’s not too early to start preparing for it. It’s a good idea to start improving your credit, paying down debt, and beefing up your down payment to make yourself as attractive as possible to lenders once you’re ready to get a loan. Our Preferred Mortgage Lender will be happy to prequalify you for a loan (FHA or otherwise) before you buy. Call us today at 732-915-4847 to schedule an appointment. Make 2016 the year you purchase your own home!