When Is a Good Time to Buy a House?
Tips to consider when deciding if now is a good time to buy
By Cassie Daniels
Buying a house is likely to be the largest and/or most important investment you will ever make. Getting the timing right can help you save money and hassle. The busiest time in the real estate calendar is spring, and this can mean a lot of new properties are put on the market. There are other good times of the year to buy, and you may need to think about when the best time is for you personally.
How is your credit rating? Are house prices falling or rising? Are you recovering from bankruptcy? Sometimes it is wise to catch a great house when you find it, but at other times it pays to be patient.
Watch housing prices
What is the market like in the area where you want to make a purchase? If prices are increasing, you may need to buy soon. If prices are decreasing, think about how fast they are falling. If prices are falling slowly and you will need to move soon, then it may not be worth waiting before buying. If house prices are plunging rapidly then you may want to wait a while.
Tax credits and interest free loans
First-time buyers in the U.S. who invested in homes between April 9, 2008 and July 1, 2009 were entitled to a 15 year interest-free government loans of up to $7,500. Tax credits and other government schemes are not always available, but it is worth finding out if there are any upcoming schemes around the time you may want to buy. Take a look at the Web site of the Home Buying Institute to see if you are entitled to any tax credits, loans or other perks.
Mortgage down payments
Most mortgage lenders require a buyer to put down 20 percent of the price. Do you have the down payment right now? Would friends or family be willing to offer you a loan? If the answer is no, then now is not a good time for you to buy.
What is your credit rating?
In 2007, a buyer could get a mortgage with a much lower credit rating than he could in 2009. How good is your credit rating? Is there a way that you can improve it? You could monitor the minimum credit rating required for a mortgage and try to buy when that benchmark is lowered, however, it might be better to just work on fixing the issues with your credit rating.
Have you been bankrupt recently?
Mortgages are nearly impossible to get if you have been bankrupt within the past 3-5 years. If that is the case and you cannot raise the money for a house without a mortgage or other loan, then now is not a good time for you to consider buying.
Look at mortgage rates
Shop around for the best mortgage rates available. Most buyers will be looking for a 30-year mortgage, and local banks can give competitive rates. Don't shy away from trying to haggle at this stage. In 2010, long-term mortgage rates in the U.S. fell to their lowest rates since the early 1970's.
Timing and seasons
Spring is always the busiest time of the year. There will be more houses for you to see, and sellers may be vying for your offer. On the other hand, other buyers may be interested in a property you really like. July is the busiest time for movers and shippers and they often hike up their rates. Real estate agents will be busier in spring than at any other time of year and this may cause delays for buyers. Delays in closing may in turn lead to higher interest rates charged to the buyer. Christmas time can be a great time to make an offer for a property, because sellers tend to be more flexible and may be more generous. Fewer people are likely to be looking at property over the holidays, so you could benefit from having no competition for your dream home.
When you find a beautiful home and you decide to go for it, these tips could help you to get the best out of your new investment.
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