Buying a house is often one of the most significant decisions you’ll have to make in your life, and whether you’re buying alone or with someone else, it’s a huge step. As with all things with life-changing significance, it’s best to take a little time to consider your options and make sure you know what you’re getting into. So with that in mind, we’ve compiled a helpful guide of things that you should know before you take the plunge.
Timing, as they say, is everything. This comes down to two things – the current situation of the housing market, and your present life situation. Let’s start with the first one.
While it might be tempting to start house hunting at the start of the year, patience is often rewarded. According to a report by Realtor.com, the best time to buy a home is during the last week of September. After analyzing more than 50 markets across the nation, the authors concluded that the beginning of fall is the optimum time, due to:
Interest rates are also an important consideration. Buying when interest rates are low means that you can get a better deal on your fixed-rate mortgage. This leads to substantial savings throughout your repayments.
Buying when it’s the ideal time in your own life can be even more important than what’s going on in the outside world. As buying a house is a significant investment, it makes sense to do it when your finances are on the up, and you’re not already dealing with debts from other sources. Is it, for example, worth waiting an extra year or two till you’ve paid off your student loans, or you’ve finished paying for your car?
Although it can be hard to say for sure when the right time to buy a house is, this will generally be when you’ve reached a period of relative stability in your life.
Buying a home is probably going to be the most expensive thing you’ll ever purchase, and the costs don’t stop at the down payment and monthly mortgage payments. In addition to making sure that you can afford these without struggling, you also need to add the following costs into your budget:
Few things are as disappointing as finding the ideal home and then being denied a mortgage due to issues with your credit rating. Obtain a credit report well before you purchase a home so that you can resolve any problems in advance. You should also do everything you can to enhance your credit. You can do this by paying off outstanding debts and not taking out any additional loans before you apply for a mortgage.
One of the best things you can do to improve your chances of getting the home you want is to get pre-approved for a mortgage. This means that the lender will carry out a thorough review of your credit, finance, and assets to determine your creditworthiness.
As well as being a good way of avoiding issues when the time comes to actually take out a mortgage, being pre-approved shows sellers that you’re serious. This can give you a competitive advantage over other buyers. It will also allow you to know in advance exactly how big of a home loan you can take out and how much your monthly payments will be.
Again, while buying your first home can be exciting, it’s essential to take your time. Doing so will give you the space to find the best deals when it comes to choosing lenders and realtors. Most importantly, it will help you in selecting a house and neighborhood that will hopefully be a happy home for many years to come.