buy a houseThe time is right. You should buy a house now. Yes, not everyone is able to buy a house right now, but if you are able to, then do it. Over the next few years home prices will rise and so will the interest rates. There’s no time like the present to make a smart investment. Here is a look as to why now or the very near future is the right time to buy a house:

 

  • Home prices are still low but they have already seen their lowest. According to the S&P/Case-Shiller Home Price Indices housing prices nationwide were 10.2 percent higher in the first quarter than they were in the first quarter of 2012. Prices in some of the hardest-hit and most active markets jumped even more. Phoenix saw a 22.5 percent increase, followed by San Francisco with 22.2 percent, and Las Vegas with 20.6 percent. (source: Money Talks News)
  • In some areas, it’s cheaper to own than rent. Trulia estimates it can be up to 70% cheaper to own than rent depending on the location. Here in Boston, it is 40% cheaper to own than to rent.
  • Rates have seen their lows. Rates below 4% have already passed and are continuing to climb. As this blog is being written, it was just announced that mortgage rates have soared up to 4.46%…the biggest jump in 26 years. It may be time to jump on board before rates continue to increase. Nothing is guaranteed. If the economy becomes weak again, home prices and interest rates could fall again, but why take that risk?

With that being said, before you jump into buying anything, let alone a large purchase such as a house, it is important that you are in a comfortable and in a stable financial situation. The following should be considered:

  • Can you afford it? You shouldn’t be spending more than 28% of your gross income on your housing costs (mortgage, insurance, real estate taxes).
  • Do you have a down payment available? Some lenders ask for 20% however, there are several programs offered in Massachusetts that require as little as 3% or even 0% if you are a veteran who qualifies for a VA loan. The more money you put down at the time of purchase, the less interest you will pay in the long run.
  • Do you have good credit? Do you have credit at all? Some people believe that not having a credit card or not having a loan to pay off is a good thing. In some aspects it can be but when you go to apply for a mortgage you could virtually not exist in the credit world. It is crucial to establish and build your credit if you want to qualify for a large loan such as a mortgage.  The higher your credit score, the lower the interest rate you qualify for. The worse your credit is, the higher your interest rate will be, costing you thousands of dollars over the life of the mortgage.

If you can comfortably say that you fit into the categories above then it may be a smart move to buy a house now. I work with several experienced professionals in the real estate and mortgage industry who could assist in the process. Feel free to contact me at: 508-660-8888 or on the web at: www.attorneyjimbrady.com.