Before you jump into what appears to be a big house, take a step back and make sure buying it is a good idea.
Mortgage rates are at historically low levels, so a lot of people are rushing to buy a home. However, if you are looking to become a homeowner, you may have encountered some issues in your search. Namely, you might have had a hard time finding the right property given the limited number of accommodations.
But what if you to do find a nice house that seems to tick the right boxes – enough square footage, the layout you want and a nice-sized yard? You may be eager to move forward with this purchase. But if the following factors apply to you, you had better not make an offer or withdraw an offer that you have already made.
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1. You just can’t swing the asking price
Home prices have increased dramatically over the past year due to strong demand from buyers. You may have fallen in love with a house, but you realize your mortgage payment will be too expensive if you buy it. If so, you had better go.
If you take on too much real estate debt, you risk falling behind not only on your mortgage, but also on your other bills. This could, in turn, damage your credit and create a host of financial problems, including the possibility of losing your home. You’d better wait until the housing stock opens up and you can find a more affordable place to buy.
2. Home inspection reveals too many problems
The purpose of a home inspection is to make sure that there are no hidden issues lurking in the property you are looking to buy. An inspection takes place after you bid on a home and deposit a deposit which is held in escrow until you close.
Most real estate contracts include what is called a home inspection contingency. This states that if a home inspection reveals a significant problem that your seller will not resolve, you, the buyer, can opt out and get their deposit back. Some buyers today are forgoing this possibility to try to get their offers accepted in a tight market, but it is not recommended. And if your home inspector finds a big problem that your salesperson refuses to solve, that’s a good reason to back out of the business.
3. Your work is suddenly at stake
When you apply for a mortgage, your mortgage lender will require proof of stable income, whether in the form of recent pay stubs, a letter from your employer, or both. Suppose you find a place to live that you like at a time when you are still working, but you are worried about being laid off in the short term. For example, maybe your boss just told you that last quarter’s sales numbers were horrible. In this scenario, it is best not to go ahead with an offer.
Your lender might approve your application if everything looks good on paper. But taking out a mortgage and losing your job soon after could put you in an extremely difficult situation where you risk falling behind on your monthly payments.
As tempting as it may be to buy a home now, there’s a good chance mortgage rates will stay competitive for at least the rest of the year, if not beyond. As such, do not go ahead with a home purchase if there is a glaring issue, whether it is the price you are looking to pay, issues with the property or issues with the property. yourself or your employment status. In fact, as 2021 progresses, the building stock is expected to open up. If you sit still, you might find that there are better buying opportunities later in the year.