Owning real estate is a major ambition for many people; whether it is a roof over their own head or an investment for the future. But investing in your first property is also a decision that you don’t want to take lightly. Proper research is essential and you want to be completely sure what you are getting into. While there is no crystal ball with regards to timing, there are a few signs that will tell you whether or not you are ready. So, here are just a few points that you will want to consider before you take this major step.
Your Financial Situation
Obviously, owning real estate is one of the biggest financial decisions you will make in your life – if not the biggest. For more conventional mortgages, you will need a downpayment of at least 20% which will enable you to get the best repayment deal for your money. Of course, some lenders want a deposit as little as 5%, but you need to ensure that you have done all the proper calculations so you know exactly what you are getting yourself into. As well as this, you also need to be able to afford the monthly repayments. Beyond this, you need to have a good credit score in the first place or lenders are not going to have confidence that you will be able to pay the money back again.
Market Conditions
The housing market is one that comes along with countless peaks and troughs along the way. Of course, like investing in the stock market, it is impossible to get the timing completely right – unless you get extremely lucky of course. However, there are a few things that you can take a look at to give you a helping hand. First of all, check out how long the houses have been listed for in the area you are looking at. If they are being snapped up quickly, you are in a seller’s market which can drive up prices. Also, you can look at the interest rate history as these go up and down depending on the market.
Time of Year
The peak seasons when it comes to home buying are during the spring and summer as this is the time of year when there are likely to be more options around. At the same time, this also means that there is more competition around so the prices could be higher. There is something to be said for waiting until fall and winter, so this may be the strategy that you choose to adopt.
Your Current Living Situation
Where you are living currently makes a big difference to how quickly you can up sticks and leave. If you are renting, you need to work out the notice period you need to give. Make sure that you have considered all these logistical details before you actually take the plunge and buy a property as you don’t want to put yourself in a difficult situation.
