If you look back to when your parents bought a home, they were probably dealing with things like having hardly any money in the bank, having high interest rates, and making a lot of financial sacrifices on their end. As part of the American dream, owning a home has always been something that most people strive to do at least once in their adult life. While you may not be facing the same things that your parents did when they were buying a home, you may be looking at some different challenges like an uneasy economy. So, how can you tell if it is the right time to buy a home?
1. Low Interest Rates
Yes, it's true that interest rates have never been this low. If you are looking into buying a home and have all of your ducks in a row, then it's best to do everything right now when interest rates are this low. A low interest rate (especially when it's fixed) will ensure that you aren't paying too much every month and that you aren't paying too much over the life of your loan overall. Meet with a lender to see how low of an interest rate you qualify for. Things they will factor into your qualification include your salary and your credit score.
2. The Right Price
Buying a house above market value may not be the best thing for you financially. If, however, you and your real estate agent find a good house in a great area and at an even better price, then it may be time to pull the trigger. When you are able to buy something at a low price but it's in a good neighborhood, you can typically turn it around for a profit within the next few years if you need to.
3. High Renter Prices
Paying too much in rent every month can be a real waste of money. If you were to take all of the money that you pay in rent and apply it towards a mortgage, you would actually be making an investment rather than throwing it down the drain. If you are paying a lot of money in rent, then buying a place may make more financial sense for you and your wallet in the long run.
To learn a little bit more about real estate and how to make smart real estate investments, reach out to a real estate agent near you today.