Tuesday, April 2, 2013
Mortgage Minutes: Is It Time to Buy?
Mortgage Minutes: Is It Time to Buy?: From time to time I meet with a prospective first time buyer who isn't sure they are ready to jump into home ownership. Most of these...
Is It Time to Buy?
From time to time I meet with a prospective first time buyer who isn't sure they are ready to jump into home ownership. Most of these folks are curious whether or not they can become pre-approved, and if so, how much house they can buy. But they aren't quite sure if they want to move ahead with the plan. Often I am asked my opinion-should they buy now or wait?
First and foremost, if you have the means and think buying is a good idea-do not wait! Now is the time. Interest rates are still amazingly low, and prices are beginning to recover. All you will gain by waiting is a higher interest rate and a house that might cost you more. However, for some people, the hesitation has more to do with whether or not they are ready to take on the responsibility. For those folks, here are my suggestions:
1. Have you saved money for a down payment and the associated costs of up front items such as appraisal, inspections and your cash deposit? Minimally you will need 3.5% for a down payment unless you are a veteran or qualify for the USDA Rural Development program. Both are mortgages that do not require down payment.
2. Are you able to put back money for repairs? One of the great things about home ownership is that no one can tell you whether or not you can pound a nail in a wall. But one of the worst things about home ownership is that you will no longer have someone to call in the middle of the night when your drain is stopped up. You are now responsible for your own fix-its-or paying for someone to do it.
3. Do you have the time to take on such chores as lawn mowing, gutter cleaning, and leaf removal? Or can you pay someone else to do it?
4. Are your expectations of what you can buy in line with what your income says you can buy?
I think owning a home is a great thing. I would love it if everyone could own a home. But for some, that time comes later rather than sooner.
First and foremost, if you have the means and think buying is a good idea-do not wait! Now is the time. Interest rates are still amazingly low, and prices are beginning to recover. All you will gain by waiting is a higher interest rate and a house that might cost you more. However, for some people, the hesitation has more to do with whether or not they are ready to take on the responsibility. For those folks, here are my suggestions:
1. Have you saved money for a down payment and the associated costs of up front items such as appraisal, inspections and your cash deposit? Minimally you will need 3.5% for a down payment unless you are a veteran or qualify for the USDA Rural Development program. Both are mortgages that do not require down payment.
2. Are you able to put back money for repairs? One of the great things about home ownership is that no one can tell you whether or not you can pound a nail in a wall. But one of the worst things about home ownership is that you will no longer have someone to call in the middle of the night when your drain is stopped up. You are now responsible for your own fix-its-or paying for someone to do it.
3. Do you have the time to take on such chores as lawn mowing, gutter cleaning, and leaf removal? Or can you pay someone else to do it?
4. Are your expectations of what you can buy in line with what your income says you can buy?
I think owning a home is a great thing. I would love it if everyone could own a home. But for some, that time comes later rather than sooner.
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