Deep Bench: Navigating the housing market as interest rates drop

(WZAW) -- If you're in the market for a home, the process may seem daunting. This rings true whether you’re a first-time home buyer or a current homeowner considering a move.

The good news is, the Federal Reserve cut interest rates for the first time since the 2008 recession, taking a financial load off consumers looking to buy or sell a home.

If you’re going to successfully navigate the mortgage market today and come out of it a new homeowner, don’t fall behind on learning the do’s and don’ts of the process. Instead, know which options are available to you and avoid common mistakes.

Mortgage expert Lisa Cookson joined the Deep Bench on Tuesday to discuss tips on tackling the mortgage process and how consumers can find the right fit for them.

Here are some tips:

First Time Homebuyers:
· Challenges: With houses going fast and bidding wars driving up prices, it’s more critical than ever for first time homebuyers to prepare themselves financially in order to purchase a home.

· Get pre-approved: Potential home buyers may be discouraged if they aren’t able to find a house and therefore put off applying for pre-approval. Getting pre-approved now is important because it allows you to be ready when you do find the perfect home.

· Consolidate debt: Lenders consider your debt to income ratio and consolidating your debt can provide the opportunity to secure a lower interest rate and ultimately pay-off your debt faster.

· Watch your spending: Avoid making large purchases such as cars and other items that require financing. These purchases can increase debt and can make it more difficult to secure a mortgage.

Homeowners Considering a Move:
· Make your current home your dream home: It may be possible to obtain a home equity loan to finance your renovations.

· Renovate to add value: If you’re planning to stay in your home a bit longer, investigate which renovations will provide the most return on your investment when it’s time to sell.

· Make repairs now: Many homeowners put off making repairs until after they sell their home. Unfortunately, they never get to enjoy these improvements.