Should You Wait To Buy a Home?

Many experts are predicting a significant increase in the average price for a home by the end of this year.  At the same time, mortgage rates are anticipated to remain somewhat affordable for the next several months.  For this reason, now may be the ideal time to look at your finances and determine if becoming a homeowner is a viable option.

In order to assess your current situation, look closely at the relationship between what you owe and your monthly income.  Creditors, including mortgage lenders, want to know that you have enough revenue each month to make that mortgage payment without fail.  If your current debt load suggests that you may not be able to do so, then chances are that most lenders will reject your application.

Also consider your current credit rating.  While it is possible to obtain a mortgage if you have less than perfect credit, be prepared to pay a higher rate of interest.  When it comes to selecting a plan, consider the advantages and disadvantages of going with a floating interest rate rather than a fixed rate.  Along with what the experts say is likely to happen with interest rates over the next several years, your own personal approach to money management is also important.  If you feel more comfortable with a fixed rate, and are sure you can live with that rate for  the long-term, then do so.

With some idea of what type of financing you can command, turn your attention to the current listing of homes available that are within your price range.  Also consider the location of the property.  If it is located in an area that is likely to appreciate in value over the years, then the deal may be a very good one, even if you have to make some repairs from time to time.  But if your dream home is in an area that is anticipated to undergo some undesirable changes over time, then protect yourself by continuing to look for something more suitable.

Only buy if you can manage the financing commitment and the home in question is something you can be comfortable with for many years, and is likely to appreciate in value.  Keeping these factors in mind will help you determine if now is the right time to buy, or if you should wait a little longer.

Tags: mortgage