Should I Buy a House Now, or Wait?

The housing inventory is very low but the demand is high. Many home buyers find themselves in bidding wars with each other and sometimes with all-cash offers.

According to experts in housing, this means that homes are selling at a premium price in competitive markets. They believe 2020 has been a strong selling market, and that 2021 will be.

You might be thinking of buying a house, but you aren’t sure if you should wait until the market is more favorable. Experts agree that there is no right time to buy a home. The best time is when it makes financial sense for you.

Low-interest rates are attracting many people, according to Adriana Buenrostro (real estate agent at Prosper Real Estate Santa Rosa, California). She says, “That’s great if you have the downpayment, steady income, and the reserves.” “If your job is not stable or you don’t have enough cash, it can all get a little tricky.”

Here are some things to remember when you’re deciding whether to buy a home or wait.

The best timing to get a house?
The American Dream has been a part of owning a house since the beginning. It can also be a nightmare if you purchase a home before you are ready. These are some indicators that you are ready to purchase a house.

You have a stable income
Before you purchase a house, it is important to be financially stable. It’s a sign that you are ready to leap homeownership if you have a steady income stream for at least a few decades.

“We live in the midst of a pandemic. COVID-19 will help you make sure that you have a steady job. Buenrostro says that this is a huge problem right now.

Lenders require proof of consistent employment history to verify that you have sufficient income to pay for a mortgage. Most lenders will ask for the last two years’ W-2s. Some may even request pay stubs up to closing.

You can manage your debts
Next, consider your debt-to-income ratio (DTI). This is a measure of your ability to pay your monthly mortgage payments given your current debt and monthly income.

The DTI includes student loans, credit card debt, and car payments. However, it does not include living expenses like food, gas, and utilities. According to the Consumer Financial Protection Bureau, although maximum DTI levels can vary depending on lender and type of mortgage, most lenders prefer a DTI less than or equal to 43%.

The lower your DTI, the better. Prioritize paying down your debt before you enter the real estate market if your DTI is greater than that.

There are enough savings
A lender will also need to confirm that you have sufficient savings to pay the initial costs of purchasing a home.

You should be able to save enough money to cover the closing and down payments.

Depending on which type of mortgage you choose, your down payment could be between 3.5% and 20% of the purchase price. Closing costs typically add 2% to 5% to the home’s purchase cost.

Lenders want to see sufficient funds in your account to pay future mortgage payments or for emergency expenses.

Your credit score is good
Lenders use their credit scoring models to determine how risky you are as a borrower. Good credit was the 600s and 700s before the pandemic. This is according to Dan Moralez, a mortgage lender and vice president at Northpointe Bank in Michigan. He says that credit has moved up to the mid-700s or higher.

Before you begin the home-buying process, it is important to check your credit score and credit report. All three major credit agencies offer free credit reports. You can also check it every week until April 2021. You can check your credit score by visiting a credit score website or, in some cases, looking it up online.

You are ready to settle down
It is not cheap to buy a house. To live in your new house, you will need to spend thousands of dollars upfront. This includes closing costs and down payments.

When you’re committed to living in one location for a long time, you should consider buying.

Moralez states that it is important to think about your long-term goals. “Often first-time homebuyers just get started in their careers. Are they looking to move somewhere? Or are they thinking about moving on to a better job?

Remember that you may need to sell your house in the future. This is because the seller usually pays commissions to a real agent.