About 65 percent of Americans are homeowners. So, it makes sense that you also want to join this group and enjoy the perks of homeownership. Although renting is increasing in popularity as an alternative to owning a home, there are things you won’t enjoy as a tenant.
However, buying a home is a massive step, financially and even in your personal life. You want to step into the market when you’re absolutely sure that it’s the right time; otherwise, you could end up making costly mistakes.
But when is it the right time to buy a home?
Read on to find out!
When You Can Afford to Buy a Home
The median price of a home in the United States in 2021 is $270,000. Not a tiny sum by any measure. In fact, the vast majority of prospective buyers don’t have the money to buy a home in cash.
This is why the best time to buy a home is when you’re able to afford a home. Like most buyers, you’re likely taking out a mortgage. Some buyers assume being able to qualify for a mortgage equals actually affording a home.
Although most lenders have strict mortgage qualification requirements, as long as your credit score meets the requirements and your income history is solid, you can get approved. However, this doesn’t necessarily mean you’re in the best financial position to afford the home you want to buy.
If you’re employed, for example, you could be earning a good salary, but is there a guarantee that you’ll be in employment next year? You could secure a mortgage today, but if you lose your primary source of income in the future, you might not be able to keep up with mortgage payments.
As such, assess the present state of your finances and make future forecasts to determine whether you can afford to buy a home. And, don’t factor in just the closing price. Think about home maintenance and repairs, insurance, and warranties as well.
Especially when you’re buying a high-end home, like one of these properties, you have to ensure you’ve got your financial ducks in a row.
When It’s a Buyer’s Market
In the real estate market, a buyer’s market occurs when the supply of homes exceeds the demand. There are fewer buyers than there are homes. The result is home prices go down, sometimes substantially.
When you’re looking to buy a home, you want to do so when it’s a buyer’s market. You could have the upper hand when negotiating on a house, enhancing your chances of getting the best deal.
Buy a Home When Conditions Are Right
A home is a big-ticket item, possibly the biggest financial purchase you’ll make in your lifetime. When you’re planning to buy a home, don’t rush. Take time to evaluate your finances and ensure you can afford to home you want to buy. It’s also important that the economic conditions in the market favor you as a buyer.
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