When is it the right time to buy a home?

The spring homebuying season is kicking into high gear. Many buyers and sellers are ready to put winter behind them and either sell their property or move into the house of their dreams.

If you're a potential buyer, you might ask yourself when is it the right time to buy a house. Due to the sometimes complicated process, purchasing a house must be carefully thought over, because you don't want to jump into something you don't quite understand - especially something as important and life-changing as homebuying. 

Often, you will know when the time is right, and in other instances, there will be signs.

Couple outside home.The right time to buy a home can involve many variables.

When mortgage rates are low
During the last full week of March, mortgage rates declined by a few percentage points. According to Bankrate, the benchmark interest rate for a 30-year fixed rate mortgage fell to 3.9 percent from 3.93 percent.

The average 15-year fixed-rate mortgage also declined to 3.13 percent, down from 3.17 percent.

If you're unsure when to buy a house, pay close attention to mortgage rates, particularly the 30-year rate because this is the most common option. When interest rates are lower, you'll spend less money taking out a mortgage and paying the total amount of the loan back.

In many ways, the next few months are an ideal time to buy a house because interest rates are not expected to stay this low forever. Back in December 2015, the U.S. Federal Reserve decided to raise the key funds rate for the first time in nearly nine years. The central bank has also hinted at the possibility of multiple interest-rate hikes throughout 2016, although no additional adjustments have occurred up to this point.

The longer you wait to secure a low-interest mortgage, the more likely you'll end up paying more.

Availability and affordability
Most, if not all, homebuyers will need a mortgage in order to purchase a house, but this doesn't mean you should take out a mortgage on a home you can't afford. When you have the money for at least a 20 percent down payment, then you know the time is right to start looking for a home to live in.

You'll want to keep an eye on national and local trends with regards to housing affordability, because you don't want to wait too long and risk home prices skyrocketing out of your price range.

According to the National Association of Realtors Housing Affordability Index, the median price for a single-family home is $165,400. If you can comfortably afford the down payment and projected monthly payments, it's best to act sooner rather than later.

Additionally, the more homes that are available, the better off you'll find yourself because you won't get into many bidding wars. But if stock is low, you will find difficulty buying a home, and you may even end up spending more than you originally envisioned because of a seller's market.

You know your life best
Far too often, buyers try to time the market as all of the variables - from affordability, interest rates and available inventory - converge in their favor.

Your best course of action is to buy a home when you can afford it. Waiting for the market will only make the situation worse, and if you sit around for too long, you'll miss out on buying a home.

For more information about smart ways to manage your finances, contact Landmark Bank.

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