Deciding when to buy a house can feel like trying to solve a brain-bending puzzle. Some people insist that spring is the best time to buy because there’s typically a greater selection of homes on the market then. Others argue that the rise and fall of interest rates is far more critical to a successful home purchase than the turn of the seasons. For long-term planners, achieving a certain milestone might be the signal that it’s time to buy. As for the experts, most tend to offer an answer that is both elegantly simple and dizzyingly complex: the best time to buy a home is when it’s right for you financially, practically, and personally.
When to Buy a House
Although owning a home is often touted as part of the American dream, dreams can take all kinds of forms. Unsurprisingly, with so many differing perspectives and goals and longings in the mix, homeownership isn’t the top choice for every person at any given moment. To make a smart decision about homeownership, you’ll need to consult your heart, your head, and your wallet.
The Heart of the Home
Is now the time to buy a home? Check with your emotional side. As MoneyCrashers notes, being a homeowner offers some perks and some pressure that can be hard to quantify. Do you want to buy a home? Are you longing for a space that is truly yours that you can shape to fit your personal preferences without running afoul of a landlord? Would being a homeowner give you a sense that you’re building your personal and financial futures? If so, it might be time to look more closely at buying a home. However, it can be tough to appreciate the joys of homeownership if the inherent responsibilities are too overwhelming. If you believe that you might resent devoting time and energy to your home, renting may remain your best choice.
A Question of Priorities
If the idea of homeownership appeals to you on a personal level, then it’s time to consider the basic practicalities. MortgageCalculator suggests thinking about how homeownership would fit your lifestyle. Are you planning to put down roots for a while? Would you like to be part of a community? Is your employment situation stable? What about your personal life? If you’re where you want to be for the next few years, buying a house might make sense from a practical viewpoint. Owning a home can be a great way to build wealth and foster a sense of community. However, it can make things tougher when you need or want to relocate. Selling a house is a bit more involved than breaking a lease.
When you’ve decided that buying a home makes sense for you, you’ve still got one more concern that must be weighed: money. Can you afford to become a homeowner? To find out, The Motley Fool suggests contemplating a few numbers:
- Your Credit Score: A strong credit score makes it easier to get approved for a mortgage. An imperfect score won’t keep you from getting a loan, but it may limit your options and raise your costs.
- Your Income: The more you have coming in, the more you can afford to spend while still meeting your financial obligations. As a rule of thumb, your housing costs should not exceed 30 percent of your income. How much house will that get you?
- Your Debts: While some debt is considered a sign that you know how to manage credit, too much is a problem. Lenders like to see a debt-to-income ratio that’s below 43 percent.
- Your Savings: There are multiple loan programs that offer financing with little or no down payment, so you don’t have to skimp and save for eons to afford a house. However, having a decent down payment and some cash reserves can help you secure more favorable loan terms.
Do you have questions about when to buy a house? Could now be the right time for you? To get preapproved or learn more about the loan options available to you, stop by PrimeLending of Wichita today.