Is now the right time to buy or upgrade your home?
Four ways to own that decision.
Ah, March. The days are longer, the temps are getting warmer and “For Sale” signs are popping up in neighborhoods around town. If you’ve been thinking about buying your first home or making the switch to a new one, it might seem like you have to do it this spring, especially given all the recent headlines that suggest interest rates will go up in 2017. But is now the right time?
We know you’re not about to rush into such a big decision and that’s why we’ve pulled together four things that can help you weigh your options.
1. Tally your upgrade budget
What will it really cost you to buy or upgrade? This worksheet can help you think beyond your mortgage payment. Although it’s impossible to think of every cost, here are a few to keep in mind (and these don’t include the costs to buy a house like closing fees and inspection costs): property taxes, utility costs, insurance, neighborhood fees, needed repairs/upgrades that you can’t negotiate with the current seller, lawn/outdoor costs, maintenance, appliances and furniture (especially if this is your first house). And consider the cost to move. Are you coming out of a bare bones apartment or do you already have a houseful of stuff?
2. Check out your mortgage options
You can’t really know what your budget is until you know what your mortgage is. And you can’t know what your mortgage is until you know how much house you can afford. The message we’d like to get across: You have options and we can help. Sit down with a Summit mortgage loan officerwho can walk you through available programs and help pinpoint the ones that makes sense for you given your budget and needs.
3. Live like you already own it
It’s one thing to think you can afford a new house—another to know it. Before you jump in with both feet, how about a trial run? Take the costs you came up with using Steps 1 and 2 and attempt to live as if you already owned your new house for three to six months. How do the new costs feel? Manageable or incredibly stressful? How would you handle a major expense (like a furnace replacement) in addition to the new costs you’ll face?
4. Make sure you can still afford to save
We all know that more house = less money to save. It’s one thing to trade off paying for basement drywall against saving for a vacation. But buying a house shouldn’t compromise saving for critical things like the kids’ education, retirement and a rainy day fund. If you’re not already saving consistently for these types of things—or won’t be able to keep saving after you buy a house—you might need to reconsider.
Feeling a little overwhelmed? Don’t worry—you can own this decision and Summit is here to help!