3 Questions to Ask Before Buying a House
The following three questions will help to determine if now is a good time for you to buy in today’s market
1. Why am I buying a home in the first place?
Forget the finances for a minute. Why did you even begin to consider purchasing a home? For most, the reason has nothing to do with money. According to a study by the Joint Center for Housing Studies at Harvard University which revealed that the top four reasons Americans buy a home have nothing to do with money. The actual reasons are:
- A good place to raise children
- A safe place
- More space
- Control of that space
2. Where are home values headed?
Looking at home prices year over year, CoreLogic is forecasting an increase of 4.6%. In other words, a home that costs you $250,000 today will cost you an additional $11,500 if you wait until next year to buy it. Simply put, with prices increasing, it may cost you more if you wait until next year to buy. Your down payment will also need to be higher in order to account for the higher home price.
3. Where are mortgage interest rates headed?
You must be concerned about more than just prices. The ‘long-term cost’ of a home can be dramatically impacted by even a small increase in mortgage rates. According to Freddie Mac, Fannie Mae, the Mortgage Bankers Association and NAR have all projected that mortgage interest rates will increase over the next twelve months.