The current economy could dampen your homeownership dreams if you are a first-time homebuyer. Home prices are rising and inflation is increasing the cost of basic expenses, and it has affected millions of us but there is a positive side to it.
Is now the time to dive into your first home? But if you choose to wait, would you be priced out of the market? These are common questions but you must keep in mind that all is not lost yet. According to real estate experts, first-time home buyers can still enjoy many advantages in the housing market if they choose to buy right now. It might not make sense to take on a mortgage, but it is the right way to proceed. Here’s how you can better understand what is currently happening in the housing market and make the most of your first-home search.
Buying a home now
It might look entertaining to go through real estate listings regularly. You can scroll through the photos of your dream homes from the comfort of your couch and imagine how you will feel to walk into the beautiful space. However, it comes with a downside. Your favorite home could fly out of the market in just a few hours because homes are selling for more than the listing price and inflation will make it even more expensive for you to move into the space.
It is a wise decision to buy in this market if you are paying rent because even if you decide to wait out, your rent is not going to go down. When there is a fixed mortgage payment every month, it will help you hedge against the prices anywhere in the economy. Buying is the right way to enjoy wealth in the long term. Whenever you make a mortgage payment, you build equity on your home but if you pay rent, you only build your landlord’s equity. If you are above the age of 62, you can consider a reverse mortgage and make the most of this equity. Further, homeownership can make you eligible for a deduction in the mortgage interest as well as property taxes. Thus, reducing the tax liability. With time, the value of your home will rise and so will your net worth.
Tips for buying a home
Save yourself time and pain by researching the local market well before time. It will ensure your buying power is well in place before starting the home search. This means you will not waste time looking at properties you cannot afford to own. Be very clear about the market and what you can afford. You can use online search engines to get a clear idea. Next, look for a lender and go for the pre-approval before you begin looking at homes. When you proceed with the pre-approval, you will get the financial picture and a borrowing limit that you can use to keep the home search in your budget.
- Look at emerging neighborhoods
You can get a great property if you are willing to expand the search. Try to look at homes in the emerging neighborhoods and get into a good price. You can then fix up the space and build home equity. When looking at neighborhoods, remember to consider factors like curb appeal, cleanliness, public transit facility, and walkability.
- Be adjustive
You do not get the exact space you are looking for when you rent a space. Nobody does. The type of home you want could come at a premium and it could be out of your budget. You will get a bang for the buck if you can be a little adjustive. There are a lot of homes in the market but you need to be flexible and adjustive. Look at the bigger picture and do not worry about the shared walls or the association fees. You can enjoy low insurance rates and be a part of a great community.
Keep these three tips in mind when you begin looking for your first home. There are hundreds of options, but you need to look at the right places and be in the correct mindset. Always remember, your first home will not be your last. It is possible to build equity and invest in another property at a later stage. It does not hurt to be a little flexible and look at condos or multi-family homes to meet your needs at the current stage. Inflation in the market does not mean you have to push back your plans to own a home, if you plan your finances well and have the patience to look at the right neighborhoods for your home, you can find a great place to move in.