Should I Wait to Buy a House? 3 Things to Consider Before Committing
If you’re feeling ready to take on the responsibility of owning a home, you’ve probably had a nightmare or two about the housing crisis. You might’ve even reconsidered your decision altogether and thought, “Should I wait to buy a house?” While it’s true that the current market is highly competitive, interest rates are also at an all-time low.
How ready you are to buy a home also depends on your personal finances. Here are a few of the most important details to consider.
3 Things to Know About the Current Market
Housing Supply is Lower than Demand
Right now, lots of people are looking to buy, which increases the demand for housing—and drives prices way up. This leads to plenty of fierce competition for your dream home, especially as cash buyers and investors are swooping in and buying houses. However, prices are loosening up a bit, which could make this a decent time to buy depending on your situation.
Where You Buy Makes All the Difference
As remote gigs have workers leaving busy cities for tranquil suburbs, these workers are generating lots of demand in certain locations. Think Florida, Texas, and Colorado (among other booming states).
Buyer’s Remorse is Increasingly Common
While many hopeful homeowners have bought a new home in the past year, many of them have also experienced buyer’s remorse with houses that don’t meet their needs or cost a fortune to repair.
How Do I Know If I Should Wait to Buy a House?
Is Your Income Stable?
Whether you’re in the middle of a housing crisis or a market boom, you should ensure that you’re financially stable before committing to a large purchase. Has your income been steady for the past two years? You have a good shot at getting a loan. Lenders look for consistent employment to make sure that you have enough money coming in to make your payments. But income isn’t the only factor they take into account.
What Does Your Debt Look Like?
Debt is just as important to consider. If you have a high income but lots of debt, lenders may see you as a risky buyer. If you’ve read our Borrower’s Guide, you know that a debt-to-income ratio equals the percent of your gross monthly income that goes toward your debts each month. Your DTI does not include month-to-month living expenses, like food, water, or utilities. But it does take into account other types of bills, such as student loans and other debt payments.
Remember: many lenders look for a DTI ratio of 43% or less. If your ratio is higher, create an action plan to take care of your debt before applying for a loan.
How Full is Your Savings Account?
You should have enough to cover your closing costs and a three percent down payment at the very least. But to avoid paying private insurance costs each month, a down payment of 20% is ideal.
Buy a Home That Fits Your Needs and Your Savings
Should I wait to buy a house? The answer depends on how you respond to these questions. But whether the market is hot or not, a great mortgage lender can make all the difference. At Champions Mortgage, we help you acquire airtight pre-approval offers that allow you to compete against cash buyers and buy your dream home.
Let our experienced lenders answer your questions at 855-853-1522.
Ready to start? Begin your pre-approval application here.