When is it Time to Buy a House? 5 Things to Consider
How do you know when it’s time to buy a house? That’s a question only you can answer. Essentially, if you feel ready to buy a home, that may be the best indication that the time is right. As long as you can acknowledge that there’s a great financial responsibility in buying your first home and you feel prepared to accept that burden, you may be ready. To determine if that is the case, you may want to look at some of the following variables.
Buying Will Save You Money
The truth is that owning a home will probably cost less than what you’re paying out in rent each month. This is becoming truer as rent prices continue to rise across the country. To make sure this is true in your case, however, you can take a closer look at your rent and fees, comparing them to what you expect to pay each month for your mortgage, insurance, and taxes. Chances are that you’ll be paying less for a home purchase.
You’re Ready to Build Equity
On top of the fact that you’re paying more for rent than you would by buying your own home, the rent you’re paying isn’t giving you anything. Sure, you have shelter for that month, but that’s it. Conversely, when you make a mortgage payment, you’re building equity in your home and that helps you to accumulate wealth over time. As you build equity, you can access a homeowner’s line of credit (HELOC) for paying off debts, remodeling your home, or covering an emergency.
There Are Programs to Help
If you’ve already started to browse the types of available mortgages, you probably already know that loans from traditional banks are just one way to go. There are plenty of government programs that can help you get a mortgage for your first home, even when your credit profile may be in poor shape. Many programs can help you get a loan with little or no money for a down payment, while others help cover closing costs or help you get a lower interest rate. Of course, it all depends on your asset to debt ratio and your credit history, among other factors.
If you’re a veteran, you can apply for VA loans. According to Low VA Rates, the purpose of the VA loan program is to help our nation’s veterans obtain adequate housing on better terms than they could get anywhere else.
You Have a Down Payment
If you’ve managed to put away enough money for the down payment on a home, this is a clear indication that you’re ready to buy. This shows that you have the job stability and fiscal responsibility to save for your future, which will make it easier to get approved for a loan. Additionally, you’ll be more likely to have an offer accepted on the home you want.
Your Debts are Low
As you get older, you’ll accrue more debts, and it will become more difficult for you to save money. If you’re young and almost free of debts, this is the best time to buy a house. In addition to making it easier to get pre-approved for a loan, being free from other debts will help you down the road. You may need a loan or credit for unexpected home repairs, which you’ll more easily get with good credit and low debts.
When it comes down to it, only you can determine if it’s the right time for you to buy a home. If you feel able to manage the responsibility and look forward to building wealth instead of debt, this may be the best time to act. As long as you develop a good strategy for your financial future, buying a home can be a great asset.