How Hard Is It To Get A Mortgage In 2022?


Getting a mortgage can be a long and complicated process, but is it really that difficult to do in 2022? There is a lot of fluctuation in the housing market currently after the lasting effects of the COVID-19 pandemic, but getting a mortgage is absolutely achievable. 

It will take a lot of work, patience and planning, but there’s no reason why if you put in the work and save hard enough you can’t buy yourself a house in 2022. Read through our guide on the state of the housing market currently, and the steps to take if you too want to get a mortgage on a new home by the end of the year.

There Are More Buyers Than There Are Homes For Sale 

In an ideal real estate market, there are usually around six months worth of houses on the market to sell at any given sales rate. However, in the tail end of 2021 it was looking like there was less than half the amount of unsold houses left on the market than expected, and even less in places with particularly hot markets such as Atlanta.

However, as we get further into 2022 it is looking like the inventory of homes for sale is increasing, albeit slowly. This should be easing the intense pandemic experiences of multiple offers on multiple homes which many buyers were facing over the last several months. Despite these slight easings in the market, it looks like the number of buyers is going to stay significantly higher than the number of sellers for the foreseeable future.

Because of this imbalance, the demand for homes will be going up, which in turn increases prices. The slowing means that the house prices will not be increasing quite as quickly as they have in recent years.

Mortgage Rates Are Expected To Rise

In terms of mortgage rates, at the end of 2021 the average 30-year fixed rate was sitting at around just 3%, which is a historically low figure. There has been some increase so far into 2022, although typical rates are still sitting extremely low. However, the rate you get could be higher or lower, it depends on if you have a good credit score

So how do you buy a house with these mortgage rates? Well, the first step to getting a mortgage is to get in touch with a lender as soon as you can to help you fully understand the whole process as well as to get an application in. Different lenders may have different lending criteria, and you’ll need to talk to a few lenders to work out where you will get the best rates.

The fees associated with different lenders can also vary quite dramatically, so make sure to ask potential lenders their rates and fees, as well as an estimate of the closing cost.

Put Down A Higher Down Payment

It is important to remember too that putting down a higher down payment than asking price can be extremely advantageous, as it convinces sellers that your loan will go through, increasing your chances of having your offer accepted.

Once your finances are sorted, put in your application for a mortgage pre approval. This is an offer from a lender which outlines the amount they are willing to offer you and the specific terms of the agreement. Real estate agents are integral to property deals, and they will require you to be preapproved for a mortgage before they will begin showing you homes.

Shop around for a lender and apply with more than one to allow you to compare different offers and estimates to find the best deal for you. Consider the amount of the loan, the interest rates, expected monthly payments and the estimated closing costs.

Find A Local Estate Agent

With the market in the highly competitive position that it is currently in, finding a real estate agent with a good knowledge of the local area and market is essential. A good mortgage advisor will understand the community market and be able to share advice and local information with you to aid you in buying your home.

Make sure to manage your expectations, however, to avoid becoming overwhelmed or discouraged. Find out what properties in your budget are looking like, what kind of home you can afford and what kind of cosmetic updates you may need to make to transform a home that is within your budget into a dream home.

Before starting to look seriously at any homes, have a definite maximum number that you are willing to offer for buying your home, as well as how this will be structured and what terms you are willing to accept. Preparation is key, and also allows you to act faster when you find a home that you want to put in an offer on.

Work It Out And Be Patient

Work out if you have the time or the extra cash for a fixer-upper, or if you would be better off shopping at a lower price than your maximum so that you can negotiate an offer.

When it comes to getting a mortgage, patience is also key. Work hard and be vigilant, but understand that these things often take time. Although the market is a little more difficult than most of us may like right now, most people are able to find the house they are looking for eventually.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.