Thinking of buying a house but have doubts on whether now is the right time? You might have the money for the downpayment but having the money might not be good enough. Timing is also always important, especially in making huge life decisions.
We created a guideline to hopefully help clear your mind and answer these questions in your head.
When Is the Best Time To Buy A House?
When you are financially ready
Being financially ready is a must. You cannot buy a house or any property if you do not consider your financial status. Do you have enough money for the downpayment? Are all your debts cleared? Do you have enough savings?
Money is the key to owning a house but the extra cash is also important to have. It is what would save you in case of emergency expenses. You’d need to have spare for potential repairs, and for taxes and other charges. You would also need the extra money if there are spots in your house that need further furnishing.
Having savings is good but also make sure you have a good cash flow. Make sure that you can afford the monthly mortgage payment with your current income.
Basically, the more money you have, the better it is to start.
When you have good credit
Money is not enough. You have to prove that you can handle it well and that you have enough resources.
A credit score is a number that banks and other lending institutions use to discern how well you handle your finances. It can also come from your rental history, phone lines, car insurance, monthly subscriptions, and the likes. Banks look at a person’s credit report before approving a loan. If you have a good standing, the process may be smoother. But if you have little or no credit score at all, getting bank approvals may be more complex.
You should also have a secure and steady job for at least 24 months. Banks would also do a background check and look over your employment status. This can be used as proof that you can pay back the loan you’d get. If you’re the type of person who changes job every year or two, make sure you can back it up.
Above all, make sure you have no debts. Having such would lessen the possibility for you to get the loan approval.
When interest rates are low
Always keep an eye on the property interest rates. A house price is important to check but being aware of the interest rates will help you increase your savings. Though it is a case-to-case basis, generally, getting a house on a lower interest rate would cost less compared to getting it on a cheaper price but higher interest rate.
When property inventory is high
When the number of properties for sale in the market is high, this means buyers would have more options to check. Having more options would possibly also mean a lower price due to high supply. This would result in good additional savings for you.
When you are overall prepared
Buying a home requires an overall preparedness and commitment for the buyer. And by this, we mean accepting the fact that you’d be settling down for a long time in your chosen city. You should be okay with commuting to and from the location of your office to your new house and you must not have any plans of moving or relocating soon.
You should also be prepared to wake up with a new view and going home in a new street. Simply put, be excited for the changes you’d experience and be ready to do some adjustments.
When the house feels right for you
In the end, the best time is when you find the perfect home that fits your budget, your checklist, and your needs. When you are sure of what you want and you have the means to pursue it, then go for it!
When you’ve checked several items on this list, then maybe it’s time for you to buy that house. Know that being prepared financially, mentally, and emotionally is the best time to make this life-changing decision come to life.
Do you think you are ready to buy your house? Tell us why in the comments section below!