Should You Wait to Buy a Home?
You're ready to buy a home. But should you make a move right now, or wait?
It's a very common question that homebuyer hopefuls ask themselves, but the answer will typically come down to each buyer's unique situation.
That said, now might be a good time to buy if the following apply to you.
You Have Excellent Credit
Your credit score plays a key role in your ability to not only get approved for a mortgage, but also to secure the lowest interest rate possible. Mortgage rates have increased over the recent past and are continuing to climb. But if you have excellent credit, your lender may be willing to extend a lower rate in exchange for the reduced risk you pose as a good-credit borrower.
If you have a credit score of at least 740 and have shown that you're a responsible borrower with a history of timely bill payments, you're likely to score the lowest mortgage rates offered.
Your Finances Are Strong
Similar to having a very good credit score, strong finances will also make you better able to handle a mortgage. One of the biggest reasons why people wait to buy a home is because they want to make sure their financial situation is capable of carrying a mortgage. If you've already reached this goal, perhaps now is a good time to get into the real estate market to take advantage of your position.
You Have a Sizable Down Payment
One of the biggest hurdles for prospective homebuyers is coming up with a big down payment. Given the sky-high prices of homes these days, saving for a down payment can be very difficult.
But if you've managed to accumulate a lot of money to be put towards the purchase of a home, maybe now is a good time to buy. Having said that, you'll also want to make sure you have lots of capital left over, as lenders want to know that you have ample cash reserves to cover mortgage payments in case something unexpected occurs.
You're Planning to Stay in Your Home For the Long Haul
It costs money to buy a home, and not just in the purchase price. There are closing costs to pay, which can add up to anywhere between 2% to 5% of the purchase price of the home.
As such, it might make more sense to spend that money only once (or very infrequently). If you're not planning to move any time in the near future, buying now may justify these expensive closing costs.
Home Prices Are on the Rise
While there may be the odd blips in the real estate market, home prices rise over time. If you wait too long to buy a home, you'll be stuck paying more in the future than you would have if you had bought sooner. As long as your finances are lined up, perhaps buying today may be better than waiting until prices are even more expensive.
Final Thoughts
Attempting to time the market precisely can be very difficult. Ultimately, your finances and personal situation will dictate when you make a home purchase. And when you're ready, you'll want to team up with experienced agents who are familiar with the area you're looking to buy in and have the skill-set to get you the best deal possible.