Taking into account some personal and economic factors that favour home purchases, if you’re still sceptical about acquiring a home, here are some signs with which you would know you’re ready to contact a real estate agent and start scouting for properties:
#1. Readiness To Commit
Go ahead in acquiring that property, if without any doubts you’re adequately prepared and are ready to commit to owning a home.
A lot of costs can be incurred in the process of selling your home such as property taxes, home maintenance dues, legal fees, moving expenses and so on. Hence, it is advisable to occupy your home for a long span of time so that you can recoup all your expenses.
If you can commit to owning a home for five years or more and a stable income for your mortgage is also in the picture, then you can go ahead to buy the property. Also, if things change, there is the option of selling or renting your home.
#2. Owning Costs Less Than Renting:
Liaise with your bank to talk mortgage payments if the cost of owning a home is far less than what you’re paying as rent. Add any extra costs that might be incurred like condo fees, extra utility bills and compare all these costs to your amount as rent. If it turns out to be the same or less, you probably should save more money by buying a home in addition to your monthly home expenses factored into your home equity.
#3. Buyers Market:
This refers to a higher supply of homes on the market in relation to the demand. Here, demand is low and properties are not selling as fast even because supply outstrips demand. In such a situation, you have more bargaining power and thus, save yourself a lot of money in contrast to the seller’s market (where demand is high and supply of properties on the market is low).
#4. Low Interest Rates:
You can get a good interest rate on your mortgage loan if the rates are significantly low and hence, save you a ton of money. The amount of interest on a mortgage accrues over the time that the loan would be repaid.
For instance, on a mortgage of $220,000, the difference between a 4.2% and a 4.5% rate gives an additional $13,993 paid towards interest over the course of a 30-year mortgage.
#5. Adequate Funds For A Down Payment:
This is similar to finding a low interest rate. The less you owe, the less you’ll have to repay and the less you’ll have to take on for interest. Saving up for a home purchase (instead of on a trip, new car, etc.) is a great financial investment as you’ll be building equity in your house and you’ll have shelter over your head.
Season and time of year influences demand and supply of homes in the market. In springtime, there tends to be more house listings. With more homes on the market, negotiating power with the seller is increased in addition to more buyers. Onset of spring revives the real estate market after the winter season. However, if you’re willing to move during the winter, some home owners might be ready to negotiate.
Buying a property at the right time can save you a lot of money as it is a pretty big commitment, thus, if you’re not ready for the responsibility, don’t follow through on your plans. If you’re ready to commit and with additional factors like low interest rate, a ton of money for the down payment, then take the plunge immediately.