The Best Period to Buy a House
If you are thinking about buying a house, you may be wondering how timing factors into the equation. There are multiple factors that may determine when to buy a house, including the time of year, your progress with mortgage qualification, job and personal stability and general economic conditions.
Best Time of Year for Buying a House?
Experts disagree about the best season for home buying. Many realtors state that great deals can be had at any time of the year. That said, one theory advises that the best time for house hunting is during the worst weather. When weather is awful, house hunters often put off shopping, and terrific deals can be made.
Home Buying with Children
If you have school-aged children, you many want to consider buying a house during summer break so that they can start their new schools at the beginning of the school year.
Mortgage Qualification
The mortgage qualification process is a vital component of preparing to buy a house. Your bank will investigate three areas to decide if you qualify:
* Credit Score: Credit scores range from 300 to 850. A minimum FICO score of 700 is generally required for a first-time mortgage.
* Debt-to-Income Ratio: Lenders want to be sure you will be able to meet your monthly financial obligations with cash to spare. The bank will look at all your existing debt, including credit card balances and car or student loans. Most banks require a debt-to-income ratio of less than 20 percent, and less than 10 percent is even better.
* Down Payment: A larger down payment increases your chances of getting approved for a mortgage. Most lenders require the purchase of private mortgage insurance if you are putting down less than 20 percent of the home you are buying.
Job and Personal Stability
You may want to buy now; however, examining your personal situation will help you to know if this is the truly right time to buy a house. You should consider each of the following:
* Employment: Is your job secure? Do you expect to be working in this area for some time or might you soon be transferred?
* Family Situation: If your family is growing, this may be a great time to settle down in a house with lots of room for children to play. Additionally, if you have parents facing the challenges of aging, now might be the time to buy a house with room to accommodate them if necessary.
* Income and Savings: Do you currently have enough money to buy a home you love? If not, another year or two of saving just might bump you up to a better market.
* Marital Situation: If you are in a strong marriage/relationship, it may be a very good time to settle down and begin the home buying process. If your marriage is shaky or you are considering divorce, buying now may only complicate your situation.
Economic Conditions
You can’t predict what the state of the economy will be when the time is just right for you to buy a house. When the time comes, you’ll hopefully see some or all of these optimum economic conditions for home buying:
* buyers market (slow market with many available homes)
* tax incentives for first time home buyers
* low interest rates
* strong economy for employment opportunities and stability.