Should You Buy Now or Later?
When you’re on the path to purchasing a home, there are many factors to consider. Are you financially and emotionally ready to buy a house? Can you afford a down payment? Are you ready to commit to a monthly mortgage payment? Is renting really the best choice at this point in your life? You can see from these questions, homeownership bears a lot of responsibility and shouldn’t be taken lightly, but you shouldn’t let this scare you. When determining if you are ready to buy your first home, make sure you’re ready before taking the plunge into homeownership. If you feel like you’re ready, get a free online rate quote or contact a mortgage advisor. If you need some advice, keep reading.
Your finances are an important factor to consider when thinking of purchasing a house. Being able to afford a mortgage payment seems like a no-brainer, but you should sit down and genuinely think about. Make sure you will be able to make all of your mortgage payments. Taking a fixed-rate mortgage may make this question easier to answer, because the likelihood of payments changing over the life of loan is extremely low. But, if you take an adjustable rate mortgage, payments have a greater chance of varying. With an adjustable rate mortgage, you may be able to afford the fees now but they could adjust upward in the future, making it a challenge to meet those payments. It’s best to not take the risk of “thinking” you will be able to pay all the bills, but instead you should know that you can make these types of payments before purchasing a home.
Another factor to consider before buying is the stability of finances, overall. If you plan on changing jobs, recently have switched jobs, or if you’re expecting any major life changes, you should probably consider waiting until things smooth out and become more stable. Unexpected costs are something that comes with being a homeowner. If you only have funds for the exact amount of money your bills will cost, there is a possibility you could find yourself in a financial crisis if something unexpected comes up.
Not only do you need to determine if you’re financially ready to purchase a home, you should also research the current real estate market. Buying when mortgage rates and home prices are low is ideal. Overall, home prices climbed nationally an average of 13.6 percent in the past year, pushing us away from a “buyers" market. However, we all know that the market has been known to fluctuate from one week, or month, to the next. Although “timing” the market is nearly impossible to do, studying annual market trends for lending rates and home prices will help you make the most informed decision.
Since all local real estate markets are different, it’s important to be careful on generalizing what the housing market will do in the future. Most home values have risen in the past year and are also likely to rise over the coming months. So to answer the question: Buy now or wait? The general agreement is to buy sooner rather than later. If you don’t have the means to purchase in the closing of 2014, you may want to consider purchasing in the beginning months of 2015. If you wait too long, you may end up paying higher mortgage rates and a higher price for your home.
While no one has a crystal ball to see into the future and give you a 100 percent answer on what the market is going to do, a dedicated mortgage advisor from our vLoan team can offer professional advice. Again, everything depends on your local housing market and if you are personally ready to become a homeowner. So be sure to do plenty of research and feel free to contact a financial advisor today. If you’re ready, get a free online rate quote using our multi-step calculator.