Throughout the pandemic, competition has increased in the real estate market as mortgage rates hit all-time lows. Many people have traded up their rental payments for mortgage payments, entering the world of homeownership. You may be wondering, “Is now a good time to buy a house for me?” The answer is it depends.
Consider your long-term goals
Before you purchase a home, you must consider your long-term goals. Do you plan on staying in the same area or city for at least three to five years? Do you plan on expanding your family? If you are working remotely, do you plan on returning to the office? Regardless of your goals, having those in mind may help you draft a wants vs. needs list to determine if now is the right time in your life to buy a home.
Mortgage rates remain at all-time lows
Mortgage rates fluctuate daily but have remained at all-time lows over the last year, making buying a home more affordable for many people. If you are currently renting, speak with a mortgage specialist to determine how much house you could afford.
How to make yourself a more competitive buyer in today’s market
With the combination of low rates and remote working, housing inventory has declined as competition has strengthened. Here’s how to make yourself a stand-out buyer.
- Get pre-approved
A mortgage pre-approval will help you determine how much house you can afford, so you avoid wasting time looking at homes outside of your budget. It will also let the seller know that you are a serious buyer since you already took the time to speak with a mortgage company.
- Put down a higher down payment
Saving for a larger down payment on a home may also make you a more competitive buyer. This is because it may be easier for you to get approved for mortgage financing with a smaller loan-to-value (larger down payment).
- Make connections with real estate agents
Some homes are selling before they even hit the market! Speak with some local real estate agents to find out about new listings and any other relative news. GuardHill works with a trusted network of real estate agents, so get in touch if you need a referral!
- Familiarize yourself with the homebuying process
Follow our 2021 guide to buying a home to get more familiar with the steps to buying a home and getting a mortgage. The more informed you are the better prepared you will be!
Don’t wait to act if you’re ready to buy
Don’t wait for rates to move lower if you’re ready to buy a home now. Remember these helpful facts:
- Today’s prices and rates are known. Tomorrow’s are not.
- If rates fall, yet home prices continue to rise, a mortgage payment tomorrow could still be higher than what it is today.
- If both rates and home prices rise, a payment tomorrow could be even higher and harder to qualify for.
- Rising prices can also mean larger required down payments. It can be challenging to save money faster than the speed at which prices rise.