How to know that it is not the time to buy a house?
Everyone is thinking about buying a house and it is more tempting and contagious. With a low mortgage rates and the news about the future rates makes the house, look like an easy target. There are a lot of signs which tell the people to buy the house. Well, here are a few signs which tell you not to buy one.
Do not follow the crowd
Just because everyone else is buying, it does not mean that it is the right time to buy. As a matter of fact, with all the demand, it is the right time to sell. Most of the home sales happen only during summer. Parents who are planning to have a kid or planning to change schools would look for a place that is near the school. As per experts, winter is the right time to buy a house. It is the least favorable season for the sellers. The sellers would be happy to take the burden off their hands soon and thus, it makes the deal easier.
With the decrease in the mortgage rate and the loosening of the lending standard, even a low credit score might loss adequate. When you are trying to make a purchase more than your credit score could afford, you would end up in deep debt with high outstanding debts. The most important point to be noted is that the rate can jump anytime and it would make things even worse.
Start to plan about buying a house only if your credit score is excellent. This would give you a buffer time, if the rates gets bumpy. Wait for the credit score to rise a bit, before you plan.
Cash in hand
There are a lot of down payment options available and the cash in hand might not look like a problem. In case of the loan approval, the individual has to pay for the upfront mortgage insurance premium and the monthly payments. You cannot totally rely on the loan for the house. For instance, if you are planning for a $200,000 loan, you would need $3,500 and a monthly payment of $225.
In short, if you do not have 20% of the total money, you are about to get as a loan, in cash, then it is not the right time to buy a house. The house is a very big and essential investment and it is important to make sure that all the signs are right to start.