Is it a Good Time to Buy a House?
It Depends on Many Factors: Essential Questions to Ask Yourself
In this economy, buying a house depends on a lot: your financial situation, life goals, and readiness to become a homeowner. Turn on the news, and chances are you will hear a lot of talk about interest rates.
Interest rates vary but if you are seeking to be a first-time homeowner, you should start by reviewing the few easy to answer questions below. Also, begin to do your homework by asking yourself if you are ready to settle down and put down tent stakes!
Owning a home is, by far, one of the most important financial decisions you can make. According to Nerdwallet, “Beyond altering your financial picture, buying your first home also represents a substantial lifestyle change for most people. Regarding the effect on your day-to-day, homeownership is right up there with finishing school or having a child.”
If you’re wondering if this is the right time for you to buy a house, here is a short list of questions to ask yourself.
Are you ready to take on the added responsibility?
Responsibility is a real thing! Besides paying your monthly mortgage payment, owning a house comes with routine upkeep and repairs. Air-conditioners break, roofs will need to be replaced, and there is always something to clean or paint.
Despite all of this, homeownership can be one of the most rewarding experiences you can have. A home can be a place of tremendous rest and reward, given that you are ready.
Just be sure you are ready to take on the challenge. Remember: all the things you once called your landlord to fix will now be yours to do. You may think: “I’m going to buy a new, move-in-ready home.” There are always things that need to be done around “the house.”
Some people come to this point and decide to skip the thought of yard work and opt for a condo or a home with a Homeowner’s Associate fee (HOA) fee. However, HOA fees are additional expenses, and the same can be true of condos unless you find a unit that is “fee-simple.”
Do you have a steady job or income?
Having a steady job looks different today than it did 20 years ago. The question you must answer is whether your income is “steady.” Mortgage companies will want to know if you have been doing what you are doing now for at least a couple of years.
This leaves room for those who are self-employed, work a 9-to-5 or a combination of the two. In other words, you must have a regularly income. This is the first-way mortgage lenders decide whether you can pay the loan each month.
“Most mortgage lenders will request documentation showing an employment history of at least two years.” See getting a home loan.
You have solid plans for the immediate future.
The Truth: Buying a house is a commitment. If you decide it isn’t working out for you, selling it is much more involved and expensive than breaking an apartment lease.
You want to find a home where you will be comfortable for at least a couple of years. This is a place that meets your needs now and in the future. For example, you may not have children now, but in the not-so-distant future, your family could be growing. A two-bedroom home would be too small, especially if one of those bedrooms is already a home office!
A Great Decision: Look for a three-bedroom and two bath house now instead of struggling to sell your starter home and upgrading once your family is growing. You may have to save a little longer, but the effort could lead to a very smart decision.
You’ve built up savings for a down payment.
Saving up for a down payment is one of the biggest hurdles on the path to homeownership. When lenders tell you how much money is needed for closing, it can be a bit of a shock!
Contrary to popular belief, you don’t have to put down 20%. Depending on the type of home loan you’re using, the typical down payment on a house is usually 3% to 10% of the purchase price. Home loans with no down payment are also available, but be sure this type of loan is the best solution for you.
You’ll also need money for closing costs. Those will run about 2% to 5% of the total price. Having savings socked away puts you much closer to homeownership.
You can afford a location that meets your needs.
Buying a house because friends or family suggest it, can lead to trouble. On top of making sure you can handle the monthly payments; you want to make sure you purchase a home in an area that fits your lifestyle.
Don’t buy a home with plans to move quickly. Homeownership is for more than six months. You are building equity. That means you are also working on establishing your credit for the future.
Some future homeowners will stake out their favorite neighborhood and wait for either the right home to go on the market or until they can afford living there. There is always a good outcome when you know you need to save and wait.
Think about tradeoffs. For example, you may need to compromise your commute to and from the office to have a better school district for your children. Or you may be an avid runner, and moving closer to running trails may mean a different location than what is convenient.
There’s probably no perfect house or location. Perfect comes in the form of enjoying where you are and what you have. Once you have made your decision, and you are on your way to signing the papers, it is time to consider your move.
You’ve made the decision, and it is time to move.
A do-it-yourself move can be financially attractive, but it can also take time to consider and hire a moving company. When you draw two columns and list the pros and cons of both, and you factor in time and emotional stress, you quickly discover that there is not much advantage to packing and renting a truck for a DIY move. Read more.
At Lambert, we provide all the services needed to ensure a smooth local or long-distance move. Whether your needs include Packing and Unpacking Services, Loading and Unloading Services, Storage Services, or Shipping Services, we will ensure that all your important belongings get to their new location safely.
We have all types of trucks and equipment available, allowing us to specialize the services to meet your specific needs. Call Lambert for an in-home estimate today!
