It is likely that you are considering a number of factors when determining if you are prepared to purchase a home. You're considering your financial situation as well as the current state of mortgage rates, house prices, and the number of available properties. You're also trying to balance how each of those factors will affect the decision you choose.
Although the state of the housing market undoubtedly influences your choice, your financial situation and personal circumstances also contribute. According to a NerdWallet article:
“Housing market trends give important context. But whether this is a good time to buy a house also depends on your financial situation, life goals and readiness to become a homeowner.”
Concentrate on the things you can control rather than trying to time the market. The answers to these questions will help you decide if you're prepared to take the next step.
Is your current job stable and secure?
Your perception of the stability of your work should be taken into account. Acquiring a house is a significant investment, and you will be required to sign a mortgage agreement promising to repay the debt. That's a significant dedication. When making a purchase this size, it can assist to have peace of mind knowing that you have a stable career and a constant cash stream.
Have you determined your affordability?
Finding out what you can afford is the next step if you receive consistent payments. It will rely on your debt, spending patterns, and other factors. Speak with a reputable lender beforehand to make sure you understand what to anticipate in terms of numbers.
They will be able to advise you about the pre-approval procedure, the amount you can borrow, the current mortgage rates and your expected monthly payment, what to expect for closing costs, and other expenditures you should plan for. In this manner, you can decide if you're ready to buy with knowledge.
Do you have a backup plan for financial emergencies?
The amount of money you'll have left over in case of an emergency is another important consideration. Even if it's unpleasant to think about, it's a crucial issue to take into account. Avoid taking on more than you can afford for the house so that you won't be able to handle a storm when it hits. According to CNET:
“You’ll want to have a financial cushion that can cover several months of living expenses, including mortgage payments, in case of unforeseen circumstances, such as job loss or medical emergencies.”
How many years do you anticipate living in that place?
As was already discussed, there are certain up-front costs associated with purchasing a home. Furthermore, gaining equity will result in the return of that money as well as more, but the process takes time. You could not get your investment back if you intend to move too soon. For instance, it might not make sense to buy today if your goal is to sell and relocate again in a year. The National Association of Realtors (NAR) Chief Economist Lawrence Yun explains:
“Five years is a good, comfortable mark. If the price of your home appreciates considerably, then even three years would be fine.”
Thus, consider your future. It's important to consider whether you intend to move to a new city in order to pursue your impending promotion or whether you believe you will need to move closer to your loved ones in order to care for them.
Have you assembled a team of real estate professionals yet?
If not, a smart place to start would be looking for a lender and a reputable local agent. The experts can walk you through your options and assist you in determining whether you're ready to go forward or whether you still need to clear up some unfinished business.
In Conclusion
Get in touch with Chris Pataki @RE/MAX Associates (302-562-0628) if you'd like to discuss all the factors you need to take into account before deciding whether or not to buy.
by kcm.com
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