Deciding If It’s the Right Time to Buy a House
Is now the right time to buy a house? That question might be more difficult than it has ever been. Highly fluctuating market data has experts scratching their heads predicting what the future may hold, so where does that leave you? For better or worse, no matter what the current housing market looks like, a large percentage of the decision-making process will depend on your own personal situation, and factors directly related to the things that’ll impact you or your family the most. Get your ducks in a row by looking at the following considerations to make the decisions a bit clearer.
Where do you want to live?
Are you planning on moving away or is your hometown your forever home? While you can always plan to sell in the future if you want to move away, buying a home is a big commitment and complex process with lots of steps (and money to be spent) before you sign the final paperwork. It could potentially cement you in an area for longer than you’d like if the market shifts, and makes it more difficult to sell down the line.
Look into the housing prices near you or, on the flipside, where you might want to move to so you can get an idea about what kind of home you can afford. For example, if you are considering moving to areas like Pennsylvania, you might want to explore a variety of new homes in Mechanicsburg PA that can offer amenities and community living. This can help you make informed decisions based on your preferences and budget. Aside from the cost considerations, be mindful of other factors that could impact the decision. Is the climate something you want to settle into for the long term for reasons of safety, different home insurance plans to consider, or even just your personal well-being? If you have a family or plan on starting one in your new home, consider the school districts in the area you’re looking to settle in.
How much can you actually afford?
Perhaps the most obvious question is, “how much mortgage can I afford?” Not only is buying a house highly competitive, but the more your aforementioned ducks are in a row and preferably with dollar signs in their eyes, the more buying power you’re going to have.
First, assess your current and future job situation. You want to ensure you have a steady income as the last couple years have proven that once stable incomes might be shaken up by events out of your control. Where you currently stand with your debt situation could have a major impact on the ability to buy a house as well. It might be difficult to put aside enough for at least a 20% down payment, which is necessary to avoid paying for private mortgage insurance, if you’re currently struggling to pay off a mountain of debt. Be it credit card balances, student loans, or more, calculating your debt-to-income ratio can give you a lens into what lenders are using to determine how reasonable it is for you to take on more debt. Also, typically one can qualify for a mortgage with credit scores of at least 620, but the higher your credit scores, the better rates you can secure. Having higher credit scores affects other areas of your life beyond just your home that can free up more money to help with making your house payments—and beyond.
How much responsibility do you want?
Since prices are on the rise in both cases, choosing whether to rent or buy is a difficult question as well. While renting a home or apartment might slap you with a higher monthly payment than a mortgage, you might also not be responsible for all of the utility costs, worries about maintenance, and other surprises that could be off your plate by renting. This is a crucial decision in knowing if now is the time to pull the trigger on buying a house or if waiting is the best choice for you. Once you’re a homeowner, you have to consider the fact that if something breaks down, you’re going to be the one responsible for paying for it. If you don’t have an emergency fund and something needs immediate attention, you could be facing potential charges that might pressure you to lean into credit cards or take on other debts to deal with the problem. A good emergency fund should cover at least three months’ worth of your regular living expenses, so shoot for at least that before considering buying a home.
While there are some things outside of your control when it comes to buying a home, there are still many considerations that pertain only to you, so while it might be a lot to juggle at once, at least you can take a little solace in knowing that you’re the captain of your own ship during the home buying journey. The more prepared you are, the more informed of a decision you can make for you and your family in this unpredictable time.
