It is easy to see the financial side of a huge purchase like buying a house, but it’s a big move for your personal life, too. Once you have your mind set on buying a house, timing is everything. Waiting for the best time can help you find your dream home that suits your lifestyle at the best price with the best mortgage options. To figure out when you should strike, it’s important to make sure you’re ready for it both financially and personally.
Financial Timing
When Renting is No Longer the “Cheap” Option
Home prices and rental prices are constantly changing. Sometimes, it’s more affordable to buy a home than to rent. For some, the long-term investment of homeownership is a priority, since owning a home means you’re paying for something you will own, unlike with renting. Of course, other times, it’s simply the rental lifestyle itself that makes home buying a great next step. It’s important to look at possible changes in the rental market for the next few years. Rent prices often increase over time. In fact, rent prices tend to increase by an average of 6.1% year-over-year in major U.S. cities alone. Even if it is cheaper to rent now, it could be more expensive within just 5 years.
When You’re Ready for the Expense
One way to know you’re ready to make that home buying leap is by taking a good look at your savings and income. Different kinds of loans have different down payment requirements, but it’s typically a good idea to put down a healthy amount to lower your monthly mortgage payments.
A good down payment isn’t the only cost to consider. It’s a good idea to have extra money stashed away to cover any emergency repairs or maintenance costs that might crop up even with a monthly mortgage payment. There are other expenses you should be prepared to cover like mortgage fees, closing costs, taxes, the cost of moving, and any landscaping or decorating you might want to do.
When You’re Comfortable With a Big, Financial Investment
All of the money you put into your new home is an investment for the future. Unlike some other kinds of investments, real estate is often a long game. You may be able to earn back any work you put into your home if you ever choose to sell, but it can take time for that to happen and still depends on the market at the time. Money aside, the return you may get from your investment can be looked at from a non-financial point of view too.
Personal Timing
When You’re Ready to Commit to an Area
When you buy a house, you’re also buying a location. You have to be ready to stay in one place for a while, at least 5 years is recommended, so it needs to be a great fit. The area should suit your needs with the right neighborhood, schools, career or educational opportunities, commute; whatever factors are important to you. From an investment perspective, location can have a big impact on your home value in the future, something to also keep in mind when house hunting.
When You’ve Got the Stability
Though finances play a huge role in how you might time your home buying, don’t ignore your emotions. Purchasing a house is an emotional commitment just as much as a financial one. Having stability in your career, personal life, and finances can give you the emotional support you need to make buying a home the right next step.
When You Feel Comfortable Taking On the Responsibility
Buying a home of your own is exciting and it’s easy to get caught up in the process. However, homeownership comes with responsibilities that might not always be obvious right away. When you own your own home, you’re the landlord and the tenant. When it comes to keeping the yard in order, fixing appliances, or taking care of maintenance, it’s a responsibility you’ll have to take on entirely on your own.
