When Is the Right Time to Buy a House? If you plan to buy a house, we suggest making the decision now!
Since the last 14 years, mortgage rates have dropped at a record low, lenders are not asking for a high down payment, and the inventory is low, so sellers will be more than willing to sell fast.
So, the question is no longer “Buy now or wait?”
Based on the positive points mentioned above, you can build equity quickly if you buy a house now. The longer you wait, the higher the chances that mortgage rates will flip and you will make higher monthly payments.
Now that you have got the green light let’s take a look at some other things you need to consider before buying a house:
Your Credit Score
Yes, mortgage rates are low. However, to benefit from these rates, you must have a Good or Excellent credit score. The ideal credit score is above 740, which shows you as a low-risk borrower to the lender. Your history of timely payments will give the lender ease of mind that you will not miss your monthly payments.
The Down Payment
The more you save for the down payment, the less you have to borrow. Hence, most people save at least 20% for the down payments. However, this rate is flexible. Try saving at least 10% by cutting your luxury expenses for the time being.
The Period You Plan to Stay in the House
According to a study, a typical homeowner spends at least 13.2 years in a house. The reason this stat matters is because of the closing costs. When you and the seller finalize the deal and transfer the final amount to them, you also have to pay the closing costs. These costs can run between 2% and 6% of the home’s price.
Hence, it would be best to think twice before buying a house. You should plan for the future, including your personal and professional life.
Your Financial Situation
Buying a house is a huge commitment. There are plenty of things you need to consider, such as how much savings you have, do you have a steady job, and whether you can afford the extra expenses, including repair, maintenance, and insurance.
Remember: After buying a house, your expenses will increase. Put off buying furniture and décor items until you recover financially.
Don’t Buy a House If Inventory Is High
When inventory is high, sellers have a big pool of buyers to choose from who are willing to agree to their asking price. Moreover, when inventory is high, prices don’t decrease. The opposite stands for when inventory is low.
In conclusion, now is the perfect time to buy a house, thanks to the low mortgage rates. If the house you are looking at costs $300,000, you will need to save $60,000 for a 20% down payment. If you apply for an FHA loan, you will have to save $10,500 for a 3.5% down payment. Add a couple of thousand dollars more for the closing costs, and you need to save between $20,000 and $70,000.
To ease the burden of the house hunt, visit the Megan Dowdy Realty website. Schedule a meeting with their Orlando realtor to look at the listings. For more information, call 407-509-9279.
