When Is the Best Time to Buy a House: Right Now, or Wait?

You know you should buy a home. Eventually. But timing matters when it comes to such an enormous and potentially life-changing purchase. Which begs the question: When is the best time to buy a house? Does such a moment exist when all lights turn green, guaranteeing this is a decision you won’t regret?

While there’s no crystal ball in real estate, there are some fairly easy-to-read signs that a home purchase is something you should consider. Let’s dive into some of the factors that can influence whether the time is right for you to pull the trigger.

Your finances

For many people, knowing when to buy a home all comes down to the numbers. Here are the biggest pieces of that equation.

  • You have a down payment: If you need a mortgage to buy a home, you should know that most lenders will want you to show them the money—that is, have a sizable down payment. For most conventional loans, you’ll need to scrape together 20% of a home’s price, or $60,000 on a $300,000 home. Amassing that cash can be challenging, but know that some lenders can require as little as 5% down. You also may want to check into down payment assistance programs; many homeowners are surprised to find that they qualify.
  • You can afford a monthly mortgage: How much you can afford in monthly mortgage hinges on your income and debts. Higher income is good, of course; higher debt is bad. Check out a mortgage calculator for an easy way to plug in your salary and debts to see how much home you can afford in your area.
  • You have a good credit score: Your credit score is a measure of how well you’ve paid off past debts. Lenders look at this number to prognosticate how well you’ll pay them back, too. If you have no credit history, you should get some fast (lenders will want to see at least a year of payments under your belt). If your credit score is poor, you may want to do what you can to bring it up to snuff, because a higher credit score means you’ll stand to land a better loan.

Market conditions

Housing markets go through highs, lows, and bubbles—much like stocks. As such, you may be wondering whether current market conditions are conducive to buying (e.g., “Wow, you can buy a whole townhouse for under two hundred grand?”) or a total rip-off (e.g., “a two-bedroom for a half-million, seriously?!”).

Sadly, the adage for stocks applies to housing, too: It’s impossible to perfectly time the market. Yet there is still something to be said for considering economic conditions.

“You should never buy a home you can’t afford, but sometimes market conditions offer a little incentive to get off the sidelines,” says Mark Abdel, a real estate professional with Re/Max Advantage Plus in Minneapolis–St. Paul.  

You’ll want to consider the following:

  • Inventory: Look through listings for your area. If the majority of houses have been sitting on the market for more than six months, then the market is slow and prices should be OK. But if many properties get snapped up in months, or even weeks, this suggests you’re in a seller’s market—and that’s where buyer bidding wars could drive up prices. Of course, they could just continue to climb, or they may have peaked and go down. Local real estate agents can give you the lay of the land and their predictions, but just remember it’s anyone’s guess what could happen next.
  • Interest rates: Interest rates on home loans also fluctuate depending on market conditions. Currently interest rates are fairly low but have been inching up fast, which has many thinking of buying a home before they rise even higher. Make sure to check out interest rates in your area.
  • Renting vs. buying: A final factor to consider is whether it’s cheaper to own or rent, based on the market conditions in your area. You can figure that out with our rent vs. buy calculator.

Does time of year matter?

Conventional wisdom says to buy during the peak seasons of spring and summer, when there may be more options. But that also translates into more competition and potentially higher prices. That’s why you shouldn’t neglect fall and winter for home shopping, especially if the other conditions above line up.

“Buying off-season usually gives buyers more negotiating power for both the price and the closing date,” Abdel says, because off-season sellers are often more motivated to sell and therefore may be more willing to make a deal.

How long should you stay put?

Last but not least, one final factor to consider regarding when to buy a house is whether you plan to stick around. Buying a home carries a bunch of upfront costs, so it’s generally best you don’t sell soon after you’ve closed the deal. Typically home buyers should expect to stay in their house at least five years to make this investment worthwhile.

Post courtesy of realtor.com.

Home Fix-Ups

With the right touches, you can sell your home faster and for a higher price. Start by inviting a real estate agent to evaluate the place. Ask for a to-do list to make your house competitive in your neighborhood. The agent will recommend the improvements that he or she thinks will provide the most bang for your buck. For the national average cost and percentage return for 30 home-improvement projects visit www.remodeling.hw.net/cost-vs-value/2016. Before you consider pricier projects, at a minimum plan to declutter, depersonalize, clean and paint. If something-say the roof- is in serious despair, fix it if you can, even if you don’t expect to get your money back. You’ll avoid scaring off buyers or facing a demand for repairs after a home inspection. If you anticipate that a major home system, such as a furnace, is nearing the end of its useful life, pay to have it inspected and serviced.

Understanding the Basics of a Refinancing Home Loan

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Home refinancing is a big business these days to save your home from foreclosure and to save you money. Refinancing your home should be done for the right reasons to make sure that you make the right decision for your family.

As interest rates continue to soar, many homeowners today are faced with increasing costs that force them to reconsider their current mortgages. They may have done things correctly when they applied for their first home loan: did their homework with the research, compared home loan rates, sought the help of a mortgage broker, etc. The point is despite the fact that they were able to secure the best home loan for their circumstance, a lot of things has changed today. There is no guarantee that their current home loan is continuing to live up to their expectations.

Faced with such scenario, borrowers have the option to get out of their existing mortgage by availing of a refinancing home loan. The goal here is to find and secure a new mortgage that is more flexible and more affordable. A borrower’s circumstance could change in a few years because of job loss, sickness, death or simply an ailing economy. As costs rise due to changing interest rates, getting a more affordable loan is the only plausible option.

Homeowners who find themselves buried in accumulating debt can benefit from a home equity refinance credit by simply consolidating all their secured and unsecured debts. Such practice can help them save a couple of hundred dollars every month. Just imagine the amount of savings that can be made every year.

Mortgage refinancing is also one of the several solutions that can be taken by those who have the intention to acquire investment properties. Soliciting the help of a mortgage broker or talking to your lender will allow you to explore all the options you have before the refinancing process. Professional mortgage advice will give you a clear picture of what happens when you take up refinancing. They could also enlighten you about the nature of refinancing and why it would be the best option for your circumstance.

Before you refinance, make sure that you compare home loans. Using a refinancing mortgage calculator can also help when it comes to determining the amount you’ll be able to save if you choose to refinance. There are many sources of information that would be very useful. You can research on the internet by visiting mortgage websites that offer refinancing options. Mortgage websites also host some mortgage calculators that could help you compute figures.

When choosing a refinancing home loan, you can decide to stay with your lender or seek another home loan from another home loan provider. However, you must be aware of the financial implications of severing ties with your old lender. For sure, there will be some costs involved when you refinance. Consider whether or not the benefits of refinancing your mortgage would outweigh the actual refinancing costs.

Tips for Buying a Home in 2017

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Just thinking that you are ready to push through with your long-time plan of buying your home can boost up your excitement to the max. However, one should understand the challenges and frustrations that come with this endeavor. Without a doubt, people who want to buy their home, say for example one of the most beautiful homes featured in your preferred homes for sale listings would be so much interested in any tip that can help them keep the home buying experience less stressful and equally fruitful.

So, before you start searching for your dream from your chosen listings of real estate properties, do your best to keep these top four tips for 2017 in mind:

Prepare your list.

This should include the style of the home, some bedrooms and bathrooms, the size of the lawn and other amenities in the house. You should have a separate space distinguishing what you like to have and what a home needs to have. Share this list with your real estate agent so that it would be easier to narrow down the list of homes for sale he can provide you with.

Don’t skip home inspection.

While you can always check on the home personally, getting the services of a real and honest home inspector will ensure that even the most concealed aspects of the home that needs repair would be discovered. This would also help you make sure that you will gain the clear understanding about the real value of the home you intend to buy.

Demand for disclosures in a decent and professional way.

Most state laws require that sellers reveal and unveil problems that were previously discovered by people who were earlier interested in buying the home. Do ask politely when the home was last inspected.

Check on the actual location of the home.

Make sure that the home is not built in low-lying areas. You see, there will be the greater likelihood of experiencing severe flooding when heavy rains pour, so need to be prepared on this aspect if you want to buy a home in areas like this.

Buying a home requires serious planning and careful research. However, it is important that you do not get overwhelmed when you embark on buying your home, especially if this is your first time to buy a home. A home purchase is an experience that needs to be enjoyed and not to be frightened about nor be terrified of.

Required Disclosures When Selling

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Disclosures are statements which the seller makes to a buyer. It is aimed at informing the buyer about the state of the property. For instance, if there are any defect areas which need improvements, the seller will inform the buyer. If the seller had carried out unlicensed repair services which can expose the buyer to legal actions later, the seller has to disclose to the buyer so that they buyer will stay protected or know how he will protect himself if he is later prosecuted. Disclosures come in different forms depending on the state. To make the right decision, you should always check on your state regulation concerning the required disclosures when selling.

How a seller makes a disclosure

The disclosures vary from state to state. For example, the state of California requires seller and buyers to sign a document which reveals natural hazard disclosure, local and state transfer disclosures, and adversaries about the market condition among other disclosures. In some cases, you will even have to sign a Mega Law disclosure. The disclosures come in form of boilerplate documents. The documents are put together by the state real estate associations. The seller has to answer a series of yes or no questions concerning the property. The seller is also required to provide any communication document between him and his neighbors or previous owners of the property about defects on the property about to be sold. If you are a seller and you hide something, it can haunt you back as a lawsuit. Always provide all details you know about the property.

What sellers disclose to potential buyers

Some of the things the sellers disclose to potential buyers include upgrades, renovations, whether work was done with a permit or without. Buyers are required to cross check the disclosure with city building permits and zoning reports. If work was done without approval of the city authority can result to hazards or fire in the future hence it should be documented. It will also state any incidences of malfunctioning of systems in the property. If the seller has been involved in bankruptcy, he will have to disclose in the document before selling the home.

Difference between a disclosure and an inspection

The disclosure is not the same as the inspection. A disclosure is a document offered by the seller to the buyer which outlines the seller knowledge of the property. It is unlike an inspection which allows the buyer to carry out the assessment of the property with the help of third party professionals. The disclosures are provided to buyers once the seller has accepted the offer.

Signs It’s Time to Stop Renting and Start Buying a Home

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Most people are confused between buying or renting a house. Although renting is not a bad idea, but it is a great feeling to be the owner of your own house. Some signs which indicate that you stop buying rents and finally buy you own property are:

1. Privacy: If you are renting, then the owner will have a key to your house. There is a high probability that you come back home one day only to find your landlord going through your things. This constant feeling of your privacy being compromised is very annoying. Hence, it will be best to buy your own home where no one can disturb you.

2. Desire to decorate your home in your own style: If you want to paint the house or design it in your own way, then you should buy a house. In rented properties, you won’t have the freedom to express your creativity. You have no option but to stick with the existing design.

3. Low mortgage rates: Most people are generally reluctant to buy their own properties because of high mortgage rates. However, recently mortgage rates are at an all time low. Currently, it is around 3.6 %, which is very much affordable.

4. Low real estate prices: Apart from low mortgage rates, the real estate market is also at an all time low. As per experts, it is the lowest which the market can reach and from here it can only go upwards. The real estate market is very fluctuating. Hence, before the price shoots up, it will be better to buy your dream house.

5. You are willing to keep a pet: If you are planning to get a dog or a cat, then you should consider buying a house. Most landlords will not allow you to keep a pet. And those who allow, will charge a high fee.

6. Tax Deduction: Tax deduction is one of the main reasons for buying your own property. The interest which you pay on your mortgage will be deducted. Apart from that, you are also allowed to deduct property taxes.

7. You have interest in a specific locality: Sometimes you may desire to settle in a particular neighborhood or you may want your kids to attend a school in a particular locality. If there are no rented properties available there, then you have no option but to buy a house.
8. Your family is growing: If you are having a baby or your kid is growing bigger, then lack of space may be a problem for you. In that case, you will need to buy a house.

 

Home Buying – Understanding the Closing Process

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When you engage in any real estate buying, you will normally here the words closing, escrow and settlement. These are the terms you usually encounter, especially at the end of the buying process. Closing procedure is when the transfer of ownership takes place. However, even if this may sound simply, there are still a lot of homebuyers who do not really understand what closing process means.

During the closing, there are costs and other related expenses which buyers should take care of. If you only have set your budget on the amount of the selling price, then you might be short in your available funds. These costs are the ones which usually homebuyers ignore but they consumer a portion of the total budget. Thus, it is best that you have to take note of these expenses so you can include them in your concerns.

However, you will not be the only one who will go through the entire closing process. There is a closing agent who will take care of these things. This person is in charge of gathering all the necessary documents for both parties. He or she will also be the one to go over the costs related in the last process and present it to everybody. But bear in mind that it is the responsibility of the buyer to look for a closing agent.

Since you will be giving this person the authority to end the whole real estate buying process, you will need to get the best among them. Make sure that you hire someone who is already experienced in any kind of real estate transaction. Normally, there are those who look like veterans in this field but when you talk to them, they only have few ideas about the different issues which might occur later on. The good thing about hiring an experienced is he already has the capability of dealing with difference concerns and can easily look for solutions. Hence, be very careful in hiring a closing agent.

Aside from the closing agent, your legal counsel as well as the lawyer of the seller is also present in the end procedure. This will ensure that everyone is doing the steps legally. Having these two legal counsels can help in clarifying legal issues and can exercise the rights of the two parties. Sometimes one party can be behind especially if he does not have any idea of his rights in this deal. So you should have everyone concern present at the end of the home buying procedure.

Closing process is vital in every real estate transaction. This may seem to be the last phase but this is as important as the beginning of the buying process. Thus, this should not be taken for granted. If you wish to have a smooth flowing end process, be knowledgeable about the factors you must put into mind.