DCU Realty's Home Buying Guide
Summer is usually the time when most people want to buy a house with 50% of all home sales occurring during this season. However, motivated buyers during this season, especially those who want to settle before school starts, can bid up prices.
Winter time is traditionally slower. But lower demand can turn into less people looking, more personalized attention from real estate professionals, and less "bidding up" the price.
So should I consider buying a house now or should I wait? Think about the following . . .
The economic downturn that caused home prices to plummet is over. Home prices are rising and are predicted to continue to rise.
In 2014 home prices rose 6.4%. In 2015 home prices rose 4%. Kipliner forecasts a moderate rise of 5% for the latter part of 2016 and into 2017.
Kiplinger.com notes that more people are currently looking to purchase a home, but that there is a lower supply than normal of homes for sale. This tight inventory will push up prices in the near future and make it more difficult for people to purchase a home.
According to the Mortgage Bankers Association forecast, interest rates are expected to hover around 4% for another year. There is also expected to be several interest rate hikes by the Federal Reserve through 2017. But mortgage rates are not expected to skyrocket any time soon.
The Mortgage Bankers Association predicts interest rates according to the following:
The rates are based upon Freddie Mac's 30-year fixed rate.
With the increase in house prices, and the slow, steady increase of interest rates, the exact same house that you purchase today could cost considerably more in the near future.
In addition to the incentive of increasing home values and mortgage rates is a sense of pride that comes with home ownership. Like housing costs, renting rates have climbed with increased demand from those who cannot, or do not, want to buy.
Renting is also more restrictive. Homeowners determine the colors, the landscape and are in control of the upkeep and in general take better care of their living space than those who rent. No need for permission to change a color, update an appliance, or upgrade your property. And there's no necessity to move due to the whims of the landlord.
While rising interest rates and home prices are great incentives to make a home purchase, there are several questions you need to ask yourself:
- Can you comfortably afford the cost of the mortgage?
Nothing can so dull the enthusiasm of purchasing a new home to then realize too late monthly payments and expenses will strain your budget so much you'll need to scale back enjoyable pursuits just to make basic monthly mortgage payments.
A DCU Realty Agent can assist to help you decide how much you can afford so there will be no surprises. The pre-qualification process through DCU mortgage can help you determine how much of a mortgage payment you can afford.
- Have you saved enough for a down payment?
The time of low cost no down payment mortgage loans has passed. In most cases, you will need to put down a percentage of the price as a down payment. If you don't put down at least 20%, you will be charged PMI (Private Mortgage Insurance) as a result in addition to your mortgage loan amount.
Check out the different DCU mortgage payment options for different financial situations.
- How stable is your income?
An unstable income can put undue pressure and anxiety on your lifestyle and your ability to make a mortgage payment. A new job, raises that may or may not occur, and promotions that may or may not materialize can all place undue strain on making a present and/or future mortgage payment.
Talk through these situations with a DCU Realty real estate professional who can give advice based upon training and experience with similar situations.
We're part of DCU which has direct connections to DCU Mortgage and DCU Insurance. Often we can help to simplify the mortgage process. We even help you become pre-qualified online.
Check out our mortgage rates. They're some of the lowest available. Plus we'll rebate $500 if you purchase a home with us and purchase your mortgage through DCU Mortgage.