Timing is everything when you decide to become a new homeowner, and determining whether you’re ready to make your purchase can be tricky. Several factors influence your ability to buy, including interest rates and the current housing market’s status. If you are asking “When is the best time to purchase a home”, then read on.
First, to know when is the best time to buy a house in this economy…
READ: Is it a Good Time to Buy a House in 2020?
When is a good time to buy a house?
Before anything, you should figure out whether you have good credit, as your credit scores will influence the mortgage you obtain. You can obtain accurate credit reports through Equifax, Experian, and TransUnion; which are the top three credit reporting agencies.
Once you know what credit standing you have, you should ask yourself the following:
What interest rate is currently available?
The interest rates for fixed-rate, 30-year mortgages as of June 2015 are at 4%; this is below the historic record of 7%. This means that a prospective home owner with good credit could obtain incredible interest rates for their home mortgage.
Are properties in the current housing market affordable?
Geographic factors, as well as supply and demand, are the most influential in determining home prices. Therefore, determining whether the overall costs of homes are affordable can be tricky. The market has fluctuated in the past around 2006, yet reached record lows in 2012. As of now, prices are rising, and it may become more difficult to find great deals in the near future.
When is the best time to purchase a home for you?
Do you have good or bad credit?
A prospective home owner with good credit will have no problems when applying for a mortgage. Those with bad credit scores, however, might want to apply for FHA (Federal Housing Administration) loans instead. These mortgages have fewer lending requirements and are offered at smaller down payments.
Do you have a good budget plan in place?
And easy way of figuring out your budget is to subtract your monthly expenses outside of rent from your monthly income. The money you can set aside each month will tell you how high of a mortgage rate you can afford. Keep in mind that you should include home insurance, maintenance, and taxes in the amount you’ll need to pay.
What’s your local housing market like?
Examine your local housing market to figure out the prices and selling time of the homes in your area. This will help you find good deals in great areas. However, keep in mind that this home purchase research will not matter if your credit scores are low. This means that you must review your reports prior to even shopping around.