Right Time To Buy A Home With Low Mortgage Rates

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This ARTICLE On The Right Time To Buy A Home With Low Mortgage Rates Was PUBLISHED On September 29th, 2019

What is Right Time To Buy A Home With Low Mortgage Rates

Many wonder when the right time to buy a home is.

In this article, we will cover and discuss The Right Time To Buy A Home With Low Mortgage Rates.

Is 2019 The Right Time To Buy A Home With Record Low Mortgage Rates

Is 2019 The Right Time To Buy A Home With Record Low Mortgage Rates

When is the Right Time To Buy A Home?

  • Many would-be homebuyers have waited for a real estate market correction
  • However, home prices have been increasing in the past three years with no sign of a correction
  • To confuse homebuyers, mortgage rates have dropped significantly since the start of 2019
  • There are so many conflicting reports in the news with a potential pending recession
  • The economy has been great for quite some time
  • Fears of inflation concern many taxpayers
  • Talks of Trump’s trade war with China and other nations are often causing alarms on whether it will affect jobs
  • The pending 2020 election is causing uncertainty if President Trump does not get elected
  • Recent talks of the impeachment of President Trump is also another concern
  • Why all these concerns affect homebuyers? 

This is because a home is one’s biggest and most important investment. Average home prices are $297,900. Many folks who went through the 2008 Great Recession do not want a repeat of another financial disaster.

Where Are Mortgage Rates Headed?

Where Are Mortgage Rates Headed?

The Federal Reserve Board has been decreasing interest rates.

  • This year, the Feds lowered rates for the first time since the 2007 Great Recession
  • Lower interest rates by the Feds normally means lower mortgage rates
  • Today, mortgage rates are at the lowest levels since three years ago
  • Average par rates on a 30-year fixed-rate mortgage are at the 3.5% level mark
  • Just a year ago, rates were at 4.75%
  • Nobody has a crystal ball and cannot predict where mortgage rates will go
  • In the last news release of the Feds lowering interest rates by 25 basis points, mortgage rates went up sharply
  • Why is it?
  • Isn’t lower interest rates by the Feds mean lower mortgage rates?
  • In general, the answer is yes
  • However, the Feds announcement was mixed
  • Some members said they want another rate cut before year-end while others stated no more interest rate cuts until next year
  • And next year’s potential rate cut was a maybe
  • With this news, mortgage rates went up sharply

This increase in mortgage rates after the Feds announced they cut rates by 25 basis points confused homebuyers. Many are in a dilemma and do not know which direction to go. The general consensus by experts is to go ahead and purchase a home today because it is the right time to buy a home.

The Right Time To Buy A Home Is When The Homebuyer Is Financially Ready And Stable

What is The Right Time To Buy A Home Is When The Homebuyer Is Financially Ready And Stable

Most agree that a home is the best investment one can make.

  • For renters, there is never a wrong time to buy a home
  • Homeownership benefits renters in more ways than one
  • Homeowners benefit from real estate appreciation where they can gain equity over time with the combination of appreciation and paying down the mortgage
  • Homeowners get to deduct mortgage interest from their income tax returns
  • Renters do not have that luxury
  • Many homeowners who purchased a home in the past five years have tens of thousands in equity due to appreciating home prices
  • However, the right time to buy a home is not when rates are low, home prices are low, or whether or not it is a great investment

These are great factors to take into consideration. However, the bottom line is the right time to buy a home is when the homebuyer is financially ready, able, and secure.

Considerations Before Pulling Trigger In Buying A Home

Why Considerations Before Pulling Trigger In Buying A Home

The right time to buy a home is when the home buyer can take the following list of considerations and see if they are ready to become a homeowner:

  • Is your job stable?
  • Is your industry stable where if you were to lose your job that you can easily get another job?
  • How much home can you afford versus qualify?
  • You do not want to be living paycheck to paycheck where most of your monthly income goes towards your home mortgage
  • Do you have the down payment and/or closing costs for a home purchase?
  • How far are you willing to drive to and from work?
  • Are you planning on staying in your home for at least five years?
  • Will your job require a job transfer to another state or a branch location where it is beyond driving distance?
  • Are you planning on having a family?
  • Those planning on having a family should consider a single-family home purchase versus a condominium

The above factors should be taken into serious consideration when deciding on when the right time to buy a home is.

Today’s Housing Market

What is Today's Housing Market

Homebuyers should take today’s housing market into consideration.

  • Homebuyers should not rush into a home purchase due to today’s record-low mortgage rates
  • However, mortgage rates can skyrocket
  • Rates are very volatile and will continue to be so in the coming weeks and months
  • Housing inventory is low throughout the United States with the exception in higher-taxed states
  • There are states such as New York and Illinois where home prices are declining and home inventory is very high
  • This is because of high property taxes and other taxes

All in all, if your financial situation and stability are strong, 2019 and 2020 is a great year to purchase a home. There are many new mortgage products that have launched the market such as Non-QM Loans and bank statement loans for self-employed borrowers. Asset-depletion mortgages and no-doc investment property loans have made a comeback for homebuyers.

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