Buying a house doesn't come easy, and even when you've successfully applied for a mortgage, have a down payment, and have the best realtor in mind, you still have plenty of things to consider before you make that dream come true!
Therefore, why go through the hustles and tussles of buying one when you have an option of renting out or staying with your friends or family? People do so for many reasons. Some want to get the freedom to do things as they please! Property owners breathing under renters' neck bore some people. Others just want to provide a stable place for their families, have grounds to sell their homes whenever they please, pay less tax, save money, and tame as many pets as they could wish.
When's the Correct Time to Buy a House?
The right time to make the purchase is when you'll be able to land the best deal. It's the time when the economy is doing well, there is a wide selection of houses at your disposal, and you're in a good financial position to afford the house in the first place. Understandably, you will get the best deal when the interest rates are low (no inflation) and the housing market is stable. Nonetheless, there are uncertainties in the market, and you cannot wait for everything to stabilize for you to buy a house. Before making that big decision, you need to do these beforehand:
1. Evaluate your finances
When evaluating your finances, consider your income levels, credit score ratings, ability to meet down payment, closing costs, and emergency funds. How much you are earning now, in future, and the stability of that income will determine if you will get the mortgage in the first place, and ability to repay it. Financial experts recommend you keep your housing costs at 30% or less of your income levels and have a good credit card score ratings in order to get loans at a lower interest rate.
2. Consider the housing market.
Timing the housing market equilibrium point (buyers' market) can be difficult since demand forces, supply forces, and government policies affect it. The market rarely stays at the latter point as the government adjusts it to control employment, interest rates, and inflation rates, etc. The best point to purchase a house is during the buyers' market, where the number of sellers exceeds buyers. Prices will be considerate and some sellers could want to lower prices to close deals. If you purchase during the seller's market when there is a huge demand from other buyers, it will be costly, as sellers will have multiple offers on their table to consider.
To get a gist of the housing market to introspect the pricing trends in your area, the duration it takes for one to sell a home if there're new constructions, and relate how the housing prices will compare to income, unemployment as well as inflation.
3. Think about your life stage.
The millennial, newlyweds, family people, and retirees will make distinct choices when buying a house as certain things please them. Also depending on their stage, this could be an identification of their lifestyle, wealth, as well as properties.
If you're a student, that stage will make it impossible to buy a house. But when you land your first job, you'll enter into a different stage of needing to purchase your first house. At this stage, however, you will want to consider saving some funds for repaying your collegiate loans. Therefore going for an affordable apartment that needs minimum maintenance will be the correct way to go. The newlyweds are in a completely different stage and they'll purchase property according to their future life. They would want a stable place for their incoming families, which is something that a happy family would consider as well.
Thus, buyers on the hunt to buy a family residence will consider larger properties with upscale entertainment amenities, outdoorsy spaces, and other indoor recreation areas. Thus, consider the stage you fall in, and the consequences of buying the type of house you're after.
What's the Procedure for Buying My Next House?
With an understanding of the right time to buy your dream dwelling and the factors, you'll need to consider, begin the process of buying a house by:
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Researching the available houses listed on the market. There are myriads of online listing for houses to get you started, and you can supplement that with the houses for sale posted on newspaper, magazines as well as other traditional listings.
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After deciding on which house you are in for, ascertain if you can afford it. Will you be able to make the down payment? Can you get a mortgage for it?
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Find a mortgage banker to get a gist of how much lending any financial institution will offer. The amount is usually pegged on the investments, savings, and income, which you'll have to submit statements for.
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You can now get real estate agents to get info on the available homes and neighborhoods. They've tons of experience in the field, and they'll be also of great help when you are looking to sell the house.
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You can now decide which house to buy and make the offer.
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After you reach an agreement on what to pay, your lender can arrange for a home inspection, appraisal, and for the paperwork to be done.
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The last stage will need you to sign the paperwork making you the legal owner of the house.
To Conclude
In conclusion, house buying process takes into account many facets, and even if you've all the cash in the bank, you'll need to understand the correct time to buy a house, so that you do not end up selling it a loss. It's key to get the real estate agent for the job, more so if buying a house for the first time!
To learn more, watch the video below: