The decision of when is the best time to buy a house is a personal one is different for everyone and it could depend on multiple or different factors. So how to know if you should buy a house now? Let me help you to figure out if you should buy a home soon or whether you might be better off waiting.
This is one of the most important things for lenders. They want to reassure that you have a stable income to cover the cost of the mortgage; and that will be reflected in the form of stable employment history. Lenders will verify with one of the requirements to apply for a loan which is the last 2 years of W-2. For self-employed, they will ask you to present your tax returns for the last 2 years and your 1099 during that time. As long as you’re safe with stable employment and about your ability to cover your mortgage payments, this opportunity could tell you that is a great time to buy a home.
Were you aware that you could purchase a home with a 3% – 3.5% down payment? If you saved over 3% of the average cost of a home, you could possibly be ready to buy a house. I said over 3% because along with your down payment you will have other fees in your purchase. So after the lender makes sure you can cover your monthly mortgage payments, they will also want to verify that you have enough amount of savings to cover the upfront cost of buying your home. And the additional fees besides the down payment will be closing costs and reserves.
Are you happy with it? We are seeing lenders imposing tighter requirements to qualify for a mortgage since March. Yes, lenders are being stricter with borrowing requirements and unless your credit score is indeed competitive, you may not qualify for the best mortgage rates. Instead, if your score is low, you’ll likely end up paying more for your home over time.
Another requirement from lenders before approving you is this. The DTI is a measure of how likely you are to pay them back or if you can afford another debt, looking at your current debt obligations with your monthly income. If actual your debt is more than 40-45% of your income, then it may be worth focusing first on
As far as interest rates, the market conditions are working in your favor. We are seeing for the last couple of months that interest rates have been either in the low 3’s or 2.8something% and those percentages have been the lowest in history. Therefore, you’ll pay less overall when you borrow money. That alone is a good reason to buy your home right now. However, you want to also consider if we are in a buyer’s or seller’s market. Experts believe that interest rates will remain competitive in the remainder of 2020
Overall, it really depends on your main motivation to buy right now but if you find the right house and it fits neatly within your budget. it’s best to buy now.
Experts say that they expect the mortgage rates and the number of homes to remain relatively low, meaning home prices are highly probably to continue to increase. Thus those hoping to get the most for their pocket should consider trying to make a purchase before mid-January.
Don’t hesitate to contact me if you are interested to know more about the home buying process or to know how we can do a free virtual buyers/sellers consultation.
Also, If you are thinking about buying or selling in Miami, CLICK HERE or you can call me at 786-376-2398.
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