Purchasing a new home is likely the most significant investment you will make in your lifetime. With so much on the line, it’s important to be fully informed before you dive into a home purchase. If you’re considering purchasing a new home, there are three essential homebuyer questions you need to think about.
Question 1: Why do I want a new home?
Do you need more space for your growing family or are you downsizing after your kids have grown? Are you looking for a home in a new neighborhood or do you want to find a different home in your current one? Is safety an issue or do you just want more space to spread out?
These are some of the most common reasons why people buy a new home, and figuring out which one fits your situation is very important. It will determine where you look for a home, how quickly you need to get into a new home, and will in large part also determine how much money you will need to spend. But at this stage of the game it’s the non-financial benefits such as space or safety that should be the biggest reason why you decide to purchase a new home or not.
Question 2: Is it a good investment?
Once you’ve determined your primary purpose for purchasing a new home, it’s time to consider the financial ramifications. After so many people lost their homes during the Great Recession, making sure your new home purchase will be a sound investment is a critical consideration to make. Fortunately now is a great time to buy a home and make a good investment for the future.
According to Kiplinger, houses haven’t been this affordable since the early 1990s. In fact, since the peak of the housing market in 2006, the average mortgage payment in the U.S. has dipped from over $1,000 per month to just $645. Even though we’ve seen prices appreciate at a faster-than-normal pace this year in Fremont County, homes are still highly affordable. But since home prices are projected to rise between 10-20 percent by 2018, buying a home now represents a great investment opportunity.
Question 3: What about Mortgage Rates?
For the last few years mortgage rates have been hovering around levels not seen since the 1950s. But with the continuing recovery of the housing market, rates are bound to increase. Right now the average mortgage rate in the U.S. is 4.1 percent, but by this time next year economists predict rates will be a full percentage point higher. While that might not sound like a big deal, when you’re paying on a loan of hundreds of thousands of dollars over 30 years it can really add up. You’d be doing yourself a favor to buy sooner rather than later!
Ultimately making the decision to buy a home comes down to a lot of factors. Unfortunately, most of us don’t have bags of money sitting around to buy our dream home whenever we please! But taking careful consideration of these questions and consulting with a Realtor can help get you on your way to finding a new home.
If you’re looking for a new home, need to sell your current one, or just have real estate questions you need answered, come on by Wind River Realty where your Hometown Realtors are always willing and able to help!
Calculator and Pen by Photosteve101 via Flickr Creative Commons