08/29/2024
When to Buy a Home🏡: 5 Signs That You're Ready
1. You are planning to be in one location for 5 or more years.
▪︎ While it may be painful to lose out on potential equity, you have to overcome the hurdle of closing costs before you come out ahead on a home purchase. Closing costs vary, but can typically be around 2% to 5% of your home’s purchase price. If you’re planning to settle down in your new home for five years or more, the appreciation in your home and the equity you build by paying down the mortgage will surpass how much you spent on closing costs — potentially making homeownership a good move.
2. There is appreciation potential in the place you want to buy.
▪︎ It’s important to take into account the local real estate climate as you determine when to buy a home. Rising or falling home prices alone won’t necessarily dictate whether it’s a good time to buy; however, you’ll want to know that you’re buying in an area that will likely appreciate in the coming years.
▪︎ Areas with a steady supply of jobs, desirable amenities like its proximity to parks, restaurants, and grocery stores, and other necessities such as sought-after school systems are likely to remain in demand and appreciate over time.
3. You want predictability.
▪︎ Over the long term, housing prices tend to go up, whether you’re renting or buying. As a renter, you’re subject to whatever rental price your landlord dictates. When you buy a home with a fixed-rate mortgage, you can ensure that the largest element of your housing expenses (your mortgage payment) won’t rise — even if you don’t get it at a rock-bottom price.
▪︎ This can be especially helpful in retirement. With a paid-off house, you’ll only have to worry about home repairs and taxes, allowing your retirement dollars to stretch further. You’ll also have the equity in your home to draw from should the need arise.
4. You have enough funds for a down payment.
▪︎ The initial down payment on a home is a huge barrier to homeownership for many. Usually down payments range anywhere from 0 to 20%, depending on the type of loan that is secured.
▪︎ For a VA or USDA loan, you're usually looking at a 0% down payment. Whereas with a conventional loan, you might be looking at up to 20% of the home’s purchase price. Once you have that cleared, you’ve taken a big step in the right direction.
▪︎ While many mortgages don’t require it, making a sizable down payment will reduce your overall monthly payment and the interest you’ll pay over the life of the loan.
5. You have an Emergency Fund saved
▪︎ Homeownership comes with additional costs that are often overlooked. For instance, if a pipe bursts or your furnace dies, renters can just call the landlord to repair it. When you own the home, you’re on the hook for those expenses.
▪︎ Knowing that repairs are an inevitable part of homeownership, having an emergency fund can prevent these events from becoming financial catastrophes. A putting away of cash also ensures that you have enough to keep up with mortgage payments if you are unable to work for any reason.
RobertCoates, Realtor®
Fueled by Coates Realty Group
Brokered by Keller Williams Atlanta Midtown
📞 404.933.0125
📧 [email protected]
