Are You A HouseHunter Wanna Be
Have you been looking at houses online? Visiting open houses? Are you an HGTV addict, watching every episode of Househunters, shouting at the t.v. show’s buyers on which house to buy? It can be fun to picture yourself in a new place, in new surroundings, in a new chapter. If you’ve been renting for a while, how do you know when the time has come turn from renter, to owner? Below, four indications that it might be a good time to turn from a bystander in the househunt to active participant, and find your next place.
#1 You’re Planning on Staying Put for a While: Real Estate historically appreciates over time, though you need to give your investment enough time, say five years, to see that return. In addition, once a new owner moves into their new place, they will often spend time (and money) making their house “theirs” with upgrades or improvements to the house. If you turn around and go to sell in a couple of years, you may not get back what you put in to the house, and are at the whim of the market and what it will bear.
#2 You’ve Been Preapproved for a Mortgage: Unless you’re paying for your next purchase in cash, you’ll need to have the creditworthiness and proof of income to qualify for a mortgage. Getting preapproved gets you in front of correcting any potential credit problems, or mistakes on your credit, that would disqualify you from obtaining a mortgage. You’ll also know exactly how much house you can buy, eliminating disappointment later should you really fall in love with a house, and then discover that when you go to get the mortgage, you don’t qualify.
#3 The Timing is Right: Looking at houses makes sense because your timeline is not too long (your lease is coming to an end, say 4-6 months), or too short (your lease is coming to an end in 30 days and you’ve not even started the process yet!) You’re in a prime position when you are ready to buy, and are willing to wait a bit if you had to. Especially in today’s market with such a small inventory and multiple offers, you can’t be too hesitant about putting in an offer. You also can’t be on such a short time-line and need to move immediately, because you might find that you’ll come out disappointed when your offer is rejected or outbid, and you’re back to square one.
#4 You’ve Got Some Cash in Savings: There’s more to the cost of owning a home than the down payment on the mortgage and the monthly mortgage payment, insurance and taxes. Whether it’s mundane repairs like fixing a leaky sink or gas for the lawn mower, or more costly repairs like a new roof or driveway, the cost of the maintenance to a home is up to you. This is an especially transitional time for someone who has historically been a renter, and who may be accustomed to relying on a landlord for those repairs. Having some money set aside in savings for the variety of homeownership costs that will inevitably occur will be a welcome financial safety net when maintenance and repairs to your new home are needed.
Whether the time is now, or later, the start of the homeownership process starts with investigating your options, and for most that means looking at houses online and visiting open houses. Continuing to do those things is the perfect way to learn about the market and determine what type of house you’ll be hunting for, until, of course, the time is right for you to turn in to active House-Hunter.