Making the leap from tenant to homeowner is a big step, and it's one that you should be sure that you're ready for before you take it. However, homeownership does have some distinct advantages over renting, and if you know you want to be a homeowner eventually, it's smart to periodically take stock and see if the time has arrived. Take a look at some sure signs that you're ready to buy a home.
When Owning Is Cheaper Than Renting
Though this isn't always the case, it often happens that, eventually, the costs of home ownership are actually less expensive than the costs of renting. If you've reached that point, it's a good time to buy a home.
To determine whether or not you've reached that point, you'll have to do some research. You can start by talking to your bank about your mortgage options so that you can get an idea of what your monthly payments might be. However, make sure that you don't stop at simply comparing a mortgage payment to a rent payment – you'll also need to factor in the costs of homeowners insurance, additional utilities, and property taxes.
Of course, sometimes factors that are tougher to put a price on can be what tips the scales. For example, if you have a large family and you're having trouble finding rental homes in your area that are large enough, it might make sense to buy (or build) a bigger home even if it costs more than renting would. However, doing a cost comparison before you start shopping in earnest can still help you get a handle on the financial impact of buying versus continuing to rent.
When You Have A Down Payment
Before you consider venturing in to the world of home ownership, it's a good idea to make sure that you have some money saved up. Yes, there are ways to buy a home with little or no money down, but the fact of the matter is that you'll get the best deal on your mortgage if you can make a larger down payment.
A down payment of at least 20% will get you a better mortgage rate, a lower monthly payment, lower upfront and long-term fees, and more equity in your home. Paying a lower down payment will increase your interest and fees, and you'll probably have to pay for mortgage insurance as well. There are programs that can help you buy a home for a lower down payment, and for some buyers, they're a good deal. But you should still try to put together as much of a down payment as you can. If you don't have any down payment money saved up, you may not be ready to buy just yet.
When You're In A Buyer's Market
Sometimes, the best sign that it's time to buy a home is a market that's showing favorable conditions for you. In real estate, a buyer's market is when the demand for housing is down and homes are sitting on the market for a long time. Pay attention to home listings—are you seeing the same ones week after week? Are prices starting to drop? That's a good sign that you might be in a buyer's market.
When there are more sellers than buyers, sellers become more willing to negotiate in order to get their home sold. You also have plenty of options. In this climate, you should be able to find a home that you like and work out a very favorable deal. Keep in mind that real estate markets are very location-specific—the market might be great in your city, but not so great in a city nearby. Talk to a local real estate agent who knows the area you want to buy in. They'll know whether that area is a buyer's market or a seller's market.
Buying a home is a big decision, and it's worth doing the work to find out whether or not this is the right time for you to buy a home. Get expert advice from a real estate agent at an agency like Premier Property Group III in your area so that you can make a smart decision about your future home.Share
19 April 2017
Although I've never worked professionally in the real estate business, I sure know my way around it. How, do you ask? Well, I have simply rented a lot of different places and worked with a lot of different landlords and real estate agents. In the past 7 years I've lived in 11 different houses or apartments, none of them my own. In finding those 11, I have looked at literally hundreds of apartments. I used to hate house hunting, but now it's kind of fun. You just need to know what you want and the right questions to ask. Hopefully this blog can help you learn some of the tricks of the trade from another renter like yourself.