Owning a home provides many people one of the best ways to increase their wealth and provide security. However, you are going to need a lot more than just a down payment. You need a decent credit rating and enough extra cash on hand to pay for any surprise expenses. Plus, it’s important to have a strong debt-to-income ratio showing you can handle any borrowed money responsibly.
If you’re ready to take the big plunge into owning a home here are some tips on how to pick the best time to buy a house.
When your in a good place with any debt you have.
You’ll need to have some previous debt to qualify when it comes to buy a home. You can’t owe too much or your debt-to-income ratio might hurt your chances to qualify.
Lenders like to see that you’re capable of paying back what you borrow. Before you decide to sit down with a lender get yourself a copy of your credit report. There are plenty of places that will give you a free copy.
Once you receive your report, address any discrepancies with all three major bureaus.. Pay down as much as you can, especially federal loans like student loans. A credit rating around 600 may get you a mortgage, but you’ll be dealing with potentially higher interest rates.
When your stable at your job.
Owning a home is a big deal. You won’t want the responsibility on your shoulders if you don’t feel settled in your area. Renting will allow you the flexibility to move easily if you need to pursue new opportunities. Naturally, the best time to buy a home is when you’re ready to plant your feet in a specific area for the long term.
Most lenders like to see at least one year of employment with your current company prior to approving a mortgage. Self-employed individuals will need to produce two to three years’ worth of tax returns verifying their income.
If you’re buying your home as part of a couple, you have some choices. Buying together doesn’t necessarily mean you need to show the income of both partners. If you earn $30,000 per year with $15,000 remaining in student loans you may not qualify, but if your partner makes $60,000 and carries less than $1,000 in debt, buying a house may become an easier process.
When you have strong savings.
When something breaks in your rental, you get on the phone with the landlord or put in a work order with maintenance to arrange a repair. When you own a home, these costs are entirely in your hands.
Financial experts recommend having adequate savings to cover six months’ worth of lost income. This becomes critical when you buy a home, as repair costs can pop up unexpectedly. Set up separate savings accounts, one for emergencies and one for your down payment.
Consider whether you would like to invest in home warranty. While you may feel tempted to omit appliances to save a few bucks on coverage, a new hot water heater or oven can cost hundreds, while many warranties have copay's as low as $75.
When interest rates fall.
Tiny differences in interest rates can impact the amount you pay overall. You can still refinance later to lower your rate, but that involves paying additional fees. While market fluctuations usually regulate themselves over time, why pay more than necessary each month while you wait for rates to drop again?
Today’s bargain rates won’t last forever. Keeping an eye on the market rates can help you determine if this is really the best time to buy a house.
When the local market looks right.
Do some research into you market conditions. This will help you decide whether it’s the right time to proceed with the home buying process. Housing markets are variable, but here are a few steps to figure out where your local market currently stands.
First, check out the listings in your area. Do they seem like their getting sold quickly, or are the homes around you sitting on the market for months? This will help you determine how competitive the process is right now. If it’s currently a seller’s market, then you’ll likely be dealing with higher bids than you would in a buyer-friendly market.
If your area is seeing endless growth and housing prices are on the rise, then it might be better to make your move now rather than later when rates climb higher. But if you know the market in your area is more seasonal or relaxed, then you might feel comfortable waiting a few months for things to line up a bit more to your liking.
A good realtor will have the experience and knowledge to help you gauge the market in your area.
The Best Time to Buy a House
Few things in life will feel as rewarding as the moment your real estate agent gives you the keys to your new home. When you do buy your home, there is no need to worry about the moving expenses. Just remember Zapt offers moving help for anything from large furniture, labor support, and storage pick up & drop offs. Zapt even works on your own schedule connecting you to 100s of on-demand movers that are ready to help you move anytime. We even offer online booking and free instant quotes to make things even simpler
