The Right Time To Buy

Learn to determine when it is the best time for you to buy a home.

Several factors can influence whether it may be the right time for you to buy a home. You need to make sure you consider the complete picture before deciding.

Your Personal Situation

Owning your home requires a lot of commitment when considering managing a mortgage, on going maintenance, insurance, taxes and utility bills. Before you are ready to take these financial responsibilities you need to ensure you are ready to buy. Purchasing a home is a long-term decision that can make the homeowner less flexible in future, for example moving locations for a new job becomes more complicated when you own a home. So, before you commit to any financial decisions, be sure to determine that the location or neighbourhood you choose to search around is where you are most comfortable living in.

Interest Rates

Ideally, you want to take advantage of lower interest rates to reduce monthly payments and the total amount paid over the lifetime of your mortgage. The interest you pay is dependant on the current market, the lender you choose and the type of mortgage product you get and many other factors. Generally speaking, mortgage lenders will offer lower interest rates to borrowers with a stronger credit score.

The Property Market

Many regard ‘A buyer’s market’ as the right time to buy a home as there are more homes for sale than buyers looking to purchase them – giving the purchaser more bargaining power. Sellers in these markets tend to offer more competitive pricing, meaning that you are more likely to get more home for your money plus, more homes to pick from.

Up Front Payments And Final Costs

Home buyers are expected to make a down payment also known as ‘deposit’ for the home. Typically, a larger down payment will result in lower monthly payments. In order to qualify for a mortgage, you will need to save at least 5% – 20% of the cost of the home you would like. If your deposit is lower than 20% then your mortgage provider may require you to pay insurance or fees.

The Time Of Year

According to market trends, more homes tend to go on sale during summer and spring months – when the weather is better and children are not in school. Looking for a home during these months will give you a broader choice of homes to pick from.

It is almost impossible to pinpoint the ‘perfect’ time to buy a home or to apply for a loan as it is dependant on the market situation as well as your personal situation. In most circumstances, people don’t have the option to put their life on hold whilst looking for the perfect time to buy. If you consider the long term benefits of buying a home and the longevity of the period that you are likely to live in the home then the positives will almost always outweigh the negatives. If you do, however, get a comprehensive financial plan that takes your individuals needs and goals into account then you’ll be able to reach this major personal decision at a right time for you.

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