Is it?….. a good time to buy a home or a bad time?<\/p>\n\n\n\n
It definitely is a question folks have different opinions about that\u2019s for sure.<\/p>\n\n\n\n
I bought my first home when interest rates were 18%- back in 1982 whew!
I couldn\u2019t live in it. The payments were $365.00 and my rent where I was sharing a home was $250.00.<\/p>\n\n\n\n
As an early investor I learned fairly quickly that it is a good time to buy a home if:<\/p>\n\n\n\n
Stabilizing your housing expense:<\/strong> <\/p>\n\n\n\n If you live in a rising economy, you plan to be there for a while, and rents are increasing\u2026. I would advise you to consider buying something.\u00a0 Remember, I could not justify paying 115.00 dollars more to live in the first home I bought over where I was currently living.<\/p>\n\n\n\n <\/p>\n\n\n\n I recently purchased a home last spring, with the same type of situation.\u00a0 The price was right, the situation was good and I was able to buy down the interest rate and lock it to keep the mortgage payments in line with the rents.\u00a0 (More on that in another blog post).<\/em><\/p>\n\n\n\n <\/p>\n\n\n\n And that fits the second question: Is your payment within your budget?<\/strong>\u00a0\u00a0 I do not recommend becoming house poor. Or debt poor for that matter.\u00a0 Cash is King. <\/p>\n\n\n\n If the mortgage payment is similar to your current rent- I would consider buying\u2026. But we need to ask the next question<\/p>\n\n\n\n Are you planning on being here a while?\u00a0<\/strong> Why does that matter? The purchase of the home incurred some expenses.\u00a0 Closing costs and possibly fix-up expenses were spent to buy the home.\u00a0 If you factor these into the housing expense, over a short period of time, purchasing becomes far more expensive than renting.\u00a0 If you are planning on owning the home for a while, these additional expenses will eventually average out and soon, your monthly housing expense will be lower than market rents.<\/p>\n\n\n\n But the last question is important too.\u00a0 Will you risk having to sell after a short period of ownership?<\/strong> \u00a0Here again there will be costs associated with the sale-\u00a0 Excise tax, closing costs, sales agents.\u00a0\u00a0 If the market price of your home has not risen enough to cover these costs, these expenses need to come from you.\u00a0 It happens that folks need to sell in difficult times and in there is a solution I\u2019ll save for another blog post.<\/p>\n\n\n\n <\/p>\n\n\n\n Rest assured, if you are buying a home or selling, there is a path and I can help you navigate it.<\/p>\n\n\n\n <\/p>\n\n\n\n Copyright \u00a9 Daniel J. Dotson 2023<\/p>\n","protected":false},"excerpt":{"rendered":" Is it?….. a good time to buy a home or a bad time? It definitely is a question folks have different opinions about that\u2019s for sure. I bought my first home when interest rates were 18%- back in 1982 whew! I couldn\u2019t live in it. The payments were $365.00 and my rent where I was […]<\/p>\n","protected":false},"author":1,"featured_media":23,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-19","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ddotson.com\/index.php?rest_route=\/wp\/v2\/posts\/19"}],"collection":[{"href":"https:\/\/ddotson.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ddotson.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ddotson.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ddotson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=19"}],"version-history":[{"count":1,"href":"https:\/\/ddotson.com\/index.php?rest_route=\/wp\/v2\/posts\/19\/revisions"}],"predecessor-version":[{"id":100,"href":"https:\/\/ddotson.com\/index.php?rest_route=\/wp\/v2\/posts\/19\/revisions\/100"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ddotson.com\/index.php?rest_route=\/wp\/v2\/media\/23"}],"wp:attachment":[{"href":"https:\/\/ddotson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=19"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ddotson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=19"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ddotson.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=19"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
Rents go up and hardly ever go down.\u00a0 They could go down.\u00a0 A slumping economy, neighborhoods that folks tend to move away from and the availability of work that supports the expenses to live there dictate the market. And that goes for rents that are always going up.<\/p>\n\n\n\n
A bad debt, like revolving credit siphons your income and puts it into somebody else\u2019s pocket. \u00a0Mortgage lenders require that your home mortgage payment should be under a certain percentage of your income.\u00a0 28-31% for mortgage and 41-48% for all debt, including mortgage.\u00a0 I recommend to folks that they ought to buy the garage before they buy the car.\u00a0 A car payment can keep you out of the home buying market, as can those credit cards.\u00a0 However, the reverse is not true.\u00a0 Fog a mirror and get a credit card.\u00a0 Walk onto a car lot and buy a car.\u00a0 It might be far more economically sound to buy a car you can pay off quickly, and have no long term credit debit, just what you can pay off month-to-month.\u00a0 And buy that home.<\/p>\n\n\n\n