When is the best time to buy a home?
The answer is, it depends. For simplicity, we’re going to break down three key factors to consider when you’re trying to determine when the best time is to purchase a home.
Those factors include:
- Establish that you’re ready
- Determine your long-term plan for the property
- Understand your finances
As we go through these factors, you’ll be able to outline some objectives to help you better understand whether or not it is the right time to buy a home.
Factors to Consider
- Establish that you’re ready
Preceding everything else, you need to determine that you’re mentally ready to go through the homebuying process.
One way that frequently helps buyers is understanding what the home buying journey will entail.
We’ve broken down 8 steps to the homebuying process for you to better understand what the road will look like and answer any questions you might have.
Another path that prospective buyers take before determining if they’re ready is attending a homebuyer seminar.
These seminars further drive home (no pun intended) the steps that you can expect to go through during your journey, and how to ease some of the bumps along the way.
- Determine Your Long-Term Plan for the Property
The next hurdle to tackle is determining what your long-term plan for the property is.
You’ll have to take a deep look into your personal factors including but not limited to:
- Do you plan on having children?
- Are you set on living in one area for the next 15-30 years?
- Are you looking to establish an investment portfolio of properties?
- Is your goal to retire in this home?
- Do you plan to rent it out in the future?
Once you have a better idea of what you’re looking to accomplish with the home purchase, your realtor will be able to help you determine the best strategy to meet your real estate goals.
Kameron Kang of The Kree Team states “It costs a lot of money to sell a piece of real estate, so you need to live in the house long enough to accumulate enough equity or value you in the home to cover those costs without taking a loss.”
Ultimately, understanding your long-term plan for the property is crucial.
Whether you’re looking to settle down and retire in the home, or use it as the first of many investment properties, your real estate team is there to make it happen.
- Understand Your Finances
Buying a home is an incredibly important, yet sometimes stressful moment in people’s lives. From your lifestyle to your finances, there’s plenty of things to consider before buying a house.
The significant financial commitment that goes into buying a home makes it all that much more important that you understand your finances before buying a house.
From the down payment to closing costs, buying a home can become costly very quickly and you want to ensure that you have the capital to cover these costs (planning with your Realtor greatly helps in that regard).
When it comes time to determine whether or not you have the finances to buy a home, you should consider the following:
1. Talk to a Lender
2. Understand any life events that could be coming up
Let’s talk about each of those a little:
A Lender can help you determine if you, and more specifically your finances, are ready to buy a home and even if the market conditions are favorable for buying a home.
Lenders often have requirements such as a minimum credit score and debt-to-income ratios that will qualify you for a mortgage and are factored in to determining the interest rate on your mortgage.
Don’t just talk to one lender, however, look around for who’s offering you the best terms.
Mortgages, often as much as 30-year terms, are a long-term commitment that can become awfully expensive and getting the lowest interest rate possible is important.
A low interest rate can save you significant money in the long run.
Understanding your life events and your lifestyle is an equally important step in determining whether or not you should buy a home.
Do you have a wedding coming up? A child on the way? You really need to make sure that you have the funds to cover these events, a mortgage payment, and the many costs that come with buying a house.
These life events can often be some of the most expensive outside of buying a home and incurring all of these costs at the same time can become overwhelming.
Making sure that the timing is one of the most important steps in buying a home.
Dave Ramsey’s blog states that “Sure, you can try timing your home purchase just right to find the widest selection or pay the lowest price. But really, the best time to buy is when your finances are in order.”
Are You Ready?
The answer doesn’t have to be ‘Yes!’.
This discussion is meant to give you two key aspects to look at to better help you understand whether or not now is the best time in your life for you to buy a piece of real estate.
If you have a long-term plan for the property and have worked out the numbers with a lender, then it’s time to get started.
If you are ready, be sure to reach out to The Kree Team so that we can help you start tackling your real estate goals.
