Do you find yourself in deep thought, wondering, is there really a, “right” time to buy or to invest in real estate? What does the market look like, where are the interest rates right now, there are so many thoughts, so many questions, but honestly in my professional and personal opinion, the right time depends on your personal readiness and your goals. Financial stability and credit play a huge factor in purchasing property whether it be a personal home or an investment property. Sometimes you need to push through the cloudiness of all the questions and all the what ifs and just ask yourself…what is right for me?
If you have a great career/job and are able to afford renting, more than likely you are in a position to purchase. Is credit a questionable concern? Credit is the key factor in buying – it controls your ability to purchase, your interest rate, terms, and a few other key components. While credit is the game changer, it is also a game so before you start randomly paying things off, find a reputable lender who will look at your credit, review it with you and work with you to get you score where it needs to be. Paying credit cards and debts off might feel good to you personally to get them paid off but if not done properly, it can seriously have a negative impact.
How do you locate one of the amazing lenders you might wonder…experienced real estate agents work with them on a daily basis. If you reach out to me, I have a couple solid lenders who will work with you and help you get to where you need to be.
Why is, “date the rate and marry the house” a dangerous game to play? Buyers might consider purchasing at a higher interest rate with the intention of refinancing within a few years. This is great if you can afford the mortgage payment for five or more years but, unfortunately, many buyers think I will go just a tad bit above my comfort zone because we will refinance in a year or two because the rates gotta come down soon, right? No, purchasing above your comfort zone is never a bright idea, let’s be honest. You want a home that is well within your comfort zone where you can build equity and live comfortably, I never advise differently because you have a better chance at building equity than you do guessing with the rates will drop.
Over investing is never advised either. The primary goal is to build equity for a decent return on your investment. No matter what happens in the future, the goal is to walk away with a little in your pocket. Purchasing the most expensive home in the area is less likely to provide you with that opportunity.
So, in reality, anytime is a great time to purchase real estate as long as it is within your personal means. Usually when interest rates are higher, prices either drop a bit or level but as soon as that interest rate drops the prices will rise on the homes. If you have investment questions, I am always here and ready for a chat to help you decide if now is your time. But to leave you with one last thought, if you are holding off purchasing because of interest rates, yet you are renting a home, you are still paying that higher rate just at the benefit of someone else.
Cheers to you and yours –
Jennifer Money