At KCI, we love the joy people get from being handed the keys to their very own house. A place where they can feel secure and live and grow. It is why we do what we do. That being said, owning a home is a big investment and because the housing market changes based on a variety of factors, some like to argue that certain times are better to buy than others. So how can you know whether it is a smart time to buy or not? Here a few questions that you can ask yourself to figure out the answer for you.
One of the biggest and most obvious factors to consider when discussing homebuying are down payments. Having enough money saved to be able to put down a comfortable down payment, cover closing costs, as well as have the recommended cushion of cash to cover 6 months of living expenses in case of emergency is what is going to set you up for success. So, the first question to ask yourself when deciding if it is a good time for you to buy is, “how are my savings?”
Another factor that will help you to decide if now is the time for you to buy a home is to get pre- approved. Find a lender you trust and run the numbers with them. Depending on your credit score, (640-740 is ideal) your debt-to-income ratio, and interest rates, a lender will help determine how much home you can afford. Of course, it is important to keep in mind that lenders will offer you a loan based off your gross monthly income (before taxes are taken out) and not your net monthly income. So be mindful of that and be reasonable in evaluating if buying a home is right for you after considering this and meeting with a lender.
A lot of people approach buying a home as a financial investment. And it can be. There are some markets, like in California, where the housing price has consistently increased year after year. For most markets, you should look to stay in your home for around 5 years before you consider selling to make a decent profit.
Most markets naturally have an ebb and flow, though. Housing prices may rise and fall depending on several factors. But if you are not looking to get into flipping houses or renting them, what you should ask yourself is, “do I really want a home?” A home can offer you a safe place to live and grow without having your mortgage rate increase year after year as it does in rentals. It can offer you a place to make memories and put down roots. But it will also require repairs which could cut into other things you enjoy, like traveling.
So really, the answer to “when is the best time to buy a house?” all depends on your personal circumstances and desires. Ask yourself these questions, and if you decide that the answer is now, give KCI Homes a call. We would love to help you.
By KCI Homes 2-23-2021