If you’re thinking about buying a house, there are several reasons why you should buy a home in 2014. A home purchase is one of many rites of passages into adulthood. But if you're a first-timer, the process can be overwhelming. You can, however, get through the buying process with ease — as long as you work with a good bank and realtor. Here are seven reasons why you should buy a home this year.
Cash in the bank for a down payment and closing costs are two reasons why you should buy a home this year. Zero down mortgage loans are practically extinct, unless you’re applying for a USDA or a VA home loan. For a conventional loan, lenders now require 5% down, or 3.5% down for an FHA home loan.
After getting a real job after college, many young adults are eager to purchase their first home. Unfortunately, if you haven’t worked for at least two consecutive years with the same employer, the lender might reject your application. If you’ve been with your employer for the past 24 months, your approval odds are better than someone who job hops — providing you have the credit score and income to meet the bank’s qualifications.
The Mortgage Banker’s Association predicts that mortgage rates will increase to 5% by the end of 2014, and to 5.5% by 2015. This is not good news for many would-be buyers, as the cost of ownership will increase. To avoid rising rates, apply for a mortgage and purchase a home in 2014 – the earlier in the year, the better.
Renting has undeniable benefits. There is the freedom to move after your lease expires; you don't have to worry about home repairs; and sometimes, renting can be cheaper than buying. At the same time, you don't own the property, therefore, you're limited in what you can do with the home. If you're tired of renting and flushing money down the toilet, buying a home can provide the stability you deserve.
If you live at home with your parents, this is a good opportunity to save money and improve your credit. But after you've achieved both goals, you might get tired of your parents’ rules. If you're ready to be on your own, look into buying a home. Speak with the bank to see if you qualify, and then work with a realtor to find a home within your budget.
There is no equity when you rent. But if you own a home, paying down the mortgage debt — coupled with rising property values — increases your home’s equity. Home equity is like a cash reserve for the future.
If you have good credit, enough income and a down payment — why not buy a house? Some people cannot qualify for a mortgage loan despite their best efforts, and others will never meet a bank’s qualifications. If you’re responsible with your finances, taking the plunge is a huge accomplishment — something to be proud of.
Of course, there is no rule that says you have to buy a home. But if buying is in your future plans, and you want to keep your rate low, now’s the year to take the leap.
What are other good reasons to purchase a home?