Question: Should I buy a home now or wait until interest rates drop?
Answer: No matter which way the real estate market is leaning, buying
now means you can start building equity right away. It also means avoiding the
potential for additional mortgage rate increases later. Rising rates can spell
serious trouble for your monthly budget, and they also result in paying more
interest over the life of the loan.
If a buyer finds a property they would
like to call home, they should not delay. You cannot time the market and a home
should be a long-term investment.
When mortgage rates drop and more buyers come back into the market, home prices will rise. Demand causes prices to go up. Remember, you “Marry the house and Date the rate.”
To put it another way, buy now if
you find the right place –you can usually refinance later.
Anytime you’re borrowing money, start by
checking your credit score. The best deals on mortgages will be available to
those with the best scores — in fact, the median credit score for mortgage
borrowers in the fourth quarter of 2023 was a very high 770.
Beyond the purchase price, buying a home comes with
closing costs that can run thousands more. So, to justify those one-time
transaction costs, it’s wise to be reasonably certain that you won’t move again
anytime soon- or that you’ll be financially stable enough to hold on to the
property and rent it out. Selling a home soon after buying can have serious tax
implications.
Ultimately, the decision of when to buy a home is up to you.
Life
goes on and moving may become a necessity, whether the timing is perfect or
not. If you’re anxious to become a homeowner, and you’ve met the criteria above
and you’re financially stable, go ahead and start house hunting.
If you’re holding out for lower mortgage rates, a bit of patience might be in order.
Rates have been volatile lately, jumping up & down.
And to repeat, you cannot time the market,
and a home should be a long-term investment.
No comments:
Post a Comment