As the events of the last few years in the real estate industry show, people forget about the tremendous financial responsibility of purchasing a home at their peril. Here are a few tips for dealing
Is Now The Right Time To Buy A South Jersey Home
Last week we answered the question, “Is Now The Perfect Time To Sell Your South Jersey Home?” But maybe you’re in the market to buy. Is it possible to determine if now is the right time to buy a South Jersey home? Answering the following questions will help you determine whether or not you should take on a mortgage payment. Purchasing a home is one of the biggest responsibilities you’ll make in your lifetime, so it’s wise to take a look at the whole picture with careful consideration.
Are you prepared to take on all of the financial responsibilities of homeownership before you buy a South Jersey home?
You must be able to manage a mortgage, home owners insurance, property taxes, monthly utility costs and on-going home maintenance before you even start looking to buy a South Jersey home. Before you make a long-term commitment to life as a homeowner, you must be able to afford the home and neighborhood you are interested in.
Are current interest rates low and do you have a high credit score?
There are many factors that determine the amount of interest you will pay on your South Jersey home. The current real estate market, your lender, the type of home loan you secure and your credit score are a few of those determining factors. Lenders will usually offer lower interest rates to borrowers with a high credit score. If you are able to secure a home loan while interest rates are low, your monthly mortgage payment and the total amount you will pay over the lifetime of your home loan will be reduced significantly.
Is it a buyer’s market or a seller’s market?
When there are more homes for sale than there are buyers to buy them, it’s a buyer’s market. And there are lots of homes to choose from! In a buyer’s market, sellers want to sell and are willing to offer competitive pricing. You may be able to get more home for your money if you choose to buy a South Jersey home when it's a buyer's market.
How much down payment will you be able to put down on a South Jersey home?
Larger down payments usually result in lower monthly mortgage payments. If your down payment is less than 20% of the purchase price, your lender may require that you purchase Private Mortgage Insurance (PMI). There may be other types of insurance or fees required, also. Know these figures ahead of time.
Can you afford to pay 3% to 5% of your loan amount to cover closing costs?
Most lenders expect you to cover closing costs. Closing costs may be higher in some areas, but most are equivalent to about 3% to 5% of your home loan amount. Need help estimating closing costs? That’s what your real estate agent can help you with.
In which season are you shopping to buy a South Jersey home?
It doesn’t really matter quite honestly. Spring usually has the largest selection of homes to choose from because the weather is nice and kids are out of school. Buyers who want to settle in before school starts favor late summer, early fall making this the second favorite season for homebuyers. But if you don't have kids at home, that won't matter to you.
Pinpointing the right time to buy a South Jersey home can be difficult. If you’ll create a comprehensive financial plan by answering these 6 questions and look at the whole picture, you’ll clearly see whether or not now is the right time to buy a South Jersey home. Give Sam Lepore a call at (856) 497-2506 if you need help creating that comprehensive financial plan. He knows the market and can help you estimate housing costs. He can help you determine if now is the right time for you to buy a South Jersey home.
Sam Lepore is a Realtor with Keller Williams in Moorestown, NJ. Call him today at 856.297.6827 ....