The real estate market keeps fluctuating, with the interest rates and house prices going up and down in response to the economic situation of the market or the environment. If you are considering buying a house and you are waiting for the perfect moment when it is most convenient for you to do so, these following 6 signs will tip you off:
#1. You Are Ready to Commit
Commitment sits at the heart of owning your own property. Consider if you have a stable job that can pay for your monthly mortgage, and if you can stick in one place for more than five years. Also think of the responsibilities that come with home ownership, paying legal fees and all the incidental costs like repairs or maintenance.
#2. Owning Costs Less Than Renting
If your monthly rent would be more than your monthly mortgage payments if you were to own a house, then it is time for you to consider purchasing your own. Contact your bank and determine what your monthly mortgage payment would be, and also add other costs like condominium fees or extra utility bills, compare this with your rent. If it is less than your rent, hire an agent and start the home buying process.
#3. Buyer’s Market
This is the period when there is a lot of listed properties in the market and a low demand for them. In this period, buyers have more bargaining power. They are able to negotiate a seller’s list price down, sometimes to a substantial amount. If you are considering owning your own house, there cannot be a better period to do so. This is opposed to seller’s market, where the market is favorable to sellers – high demand on limited listed properties.
#4. Low Interest Rates
This is another time in the market when buying a home is favorable. Interest rates can add up to substantial amounts in the long run. Therefore, look out for when you can get a reasonable interest rate on your loan from your lender. The smallest difference in interest rate can be a difference of quite a lot of money in the long term. Consider an interest rate difference of 4.2% and 4.5%, if the mortgage is $220, 000, this adds up to $13, 993, quite a lot more than pocket change I would say.
#5. Adequate Funds for a Down Payment
This helps the same way as in having a low interest rate. Pushing a hefty amount of money towards a down payment means you will owe less therefore, less interest would be added on top of your outstanding debt over the life of the loan. When you got a lot of cash lying around, it is best to invest in a house, you can regain the money anytime you want by selling, and you would have a place to live in the meantime.
Usually springtime is the busiest time in the real estate market. After the harsh months of winter, and the kids nearly done with school for another year, people who want to move do it at this time. More houses are listed, which give you an opportunity to widen your selection.
Alternatively, if you are willing to move during the winter months you could also have a good deal. Less buyers enter the market during winter, therefore sellers who are sitting on the market for a long time tend to be open to negotiations.