Do you want to buy a house in California? If yes, then in that case, you might be wondering when is the right time to do so. There are no hard and fast rules to that, but there are some recommended options. With the help of the given below tips and our mortgage service, we’ll try to solve your dilemma.
When Are You Ready to Buy a House?
You will need mortgage loans for buying a house. Our mortgage service will help you grab the loan. However, you need to consider the following before you take one:
You Have a Low Debt-To-Income Ratio
Debt-to-income ratio measures your ability to afford monthly payments, while considering your current debts and your income. Factors like car payments, credit card debts, and student loans decide your DTI. Most lenders set it to 43%. It is always recommended to have a low DTI. If you have a high DTI, try to lower it before investing.
You Have a Good Credit Score
You have to maintain a good credit score if you decide to enter the real estate market. Lenders check this to determine the risk of repayment of the loan by the borrower. Payment history and credited utilisations play a huge role in deciding your credit score. To improve your credit score, try doing the following:
- Pay the bills on time
- Aim for low credit utilization
- Avoid making many credit applications in a short time frame
Your Job is Secure
Mortgage is a major commitment. It will become difficult to repay loans in case of job loss. Thus, it is important to make sure you have a stable income before investing.
You’re Not Planning to Move
Ideally, you would want to remain in the house as long as property values as well as your equity exceed the costs of buying and selling. That includes real estate commissions along with mortgage closing costs. That takes some minimum number of years. Be sure whether you will stay in the home for long to prevent any financial loss.
Market Factors to Consider
After two long years in the pandemic, the market has started rising. Certain factors are there which will decide whether you should buy a house in California this year:
High Mortgage Rate
Mortgage rates are expected to go up this year owing to low ones in the pandemic. Most forecasters have predicted that the average 30-year fixed rate will stay below 4 percent in 2022.
High Home Prices
Home prices are rising, but experts predict that it will go up at a slower rate than it went up in 2021. According to a survey by NAR, median home prices will rise by 5.7% year over year in 2022.
In 2022, it has become a seller’s market. The number of prospective buyers has increased. This leaves buyers with few choices and huge investment.
Should You Buy a Home Now?
If you’re meeting all of the above factors, then you’re ready to buy a house in California now. Else, you might want to wait a little longer. You can use our mortgage service to begin the process.