There seems to be a bit of a buying frenzy in the real estate market right now driven by low availability and rising interest rates. Many who have been sitting on the fence wondering whether or not to buy a home are jumping into an already crowded market trying to close the deal before interest rates rise even more. According to Bankrate, interest rates have climbed over .4% since the beginning of the year. This may not sound like much but it makes a tremendous impact on your monthly mortgage payment. This has made the current climate tough for would-be buyers. High demand plus low inventory equates to bidding wars, frustration, and hard decisions. Should you go ahead and purchase a home simply because it’s available and they accepted your offer? Should you wait and see if interest rates drop or lock in the best rate you can at the moment? How long can this climate last?
Bottom line: Should you consider renting a property until you find exactly what you want or bite the bullet and just go for it?
It is enough to make anyone pull their hair out.
We know that this is a challenging decision so here are some things to consider before you transition from renter to buyer. Some of you may even want to take advantage of the seller’s market by listing your current home and transitioning into renting. Only you will know what is best for you and your family so think about these things.
Can You Afford a 20% Down Payment?
When you go to a lender for a mortgage, you will need to make down payment of 20% or more in order prevent PMI. PMI refers to private mortgage insurance and if your down payment is less than 20% your lender is going to make you purchase private insurance to ensure that they do not lose out on the money they lend to you. For some, this isn’t a big deal. However, it will make your monthly payment higher and is that something you want to deal with long-term? Perhaps it would be a wiser move to stay put until you know you can make a down payment high enough to avoid PMI or consider a home that is not as expensive.
Can You Afford Upkeep?
Purchasing a home is one thing, having the savings and monthly income to maintain it is something completely different. If you do not know if you can afford to take care of a property once you own it, maybe you should reconsider the purchase.
Another thing to ponder is how your monthly payments and costs of operation will affect your day to day living. Is owning a home worth the expense? Maybe it is. This is something only you can decide.
A Mother’s Touch Movers has the privilege of assisting the residents of Brevard County with their commercial and residential moves. From start to finish, we provide premium moving services in Melbourne, FL and beyond. We know that the decision to purchase a home is a huge one and this is why we help take the stress of moving day off of you. Contact our office today for more information.
