Considerations When Buying a Home

Location, location, location. Some say it’s the most important factor to consider when buying a home, but in actuality, there’s much more that goes into the decision-making process than just choosing a location and having the cash for a down payment.
Timing, the housing market, economic forecast, and most importantly, your personal situation play a large part in deciding when it’s the right time for you to buy a home. So, when’s the right time? Well, it depends.

Should I Buy or Rent?

Some factors to consider when deciding whether to buy a home:

Your Personal Situation

When your personal life and financial situation are aligned, buying a home can become even more rewarding.

Financially speaking, having an established career, steady income, and funds for a down payment is a great start, but there’s more to think about. Closing costs, property taxes, and homeowners’ insurance are some of the out-of-pocket expenses you’ll pay before getting the keys to your new home. Lenders will review bank statements, pay stubs, and tax returns to determine your eligibility. Good credit, a low debt to income ratio (or the percentage of your income that goes to paying off debts), and money in a savings or investment account typically translate to lower rates and more attractive terms.

You’ll also need to decide if you plan to stay put for a while. Buying, and owning, a home is a longer commitment with upfront costs and more maintenance than a rental. Since there’s no landlord to call, you should be prepared to complete minor home repairs on your own and have an emergency fund to use in the future if major home renovations are needed.

If you are in between jobs, contemplating a career change, have substantial debt, or no emergency fund, consider postponing the house hunt. Instead, focus on reducing debt and building your credit so you can purchase a home with confidence in the future. Need some help with getting your finances in order? We have advice for that, too! Check our articles: How to Stay on Top of Your Credit and How to Build an Emergency Fund.

Housing Market

Who wouldn’t want to buy a home in a buyers-market when inventory is high, interest rates are low, and you have room to negotiate a fair price? It would be the ideal situation, wouldn’t it?

While the ideal market may be hard to come by, there are ways to help ensure you pay a reasonable price when you’re ready to buy a home.

To understand a home’s market value, obtain and review sale and listing information for comparable homes in the community you want to buy. Comparable sales, or "comps", are recently sold homes that are similar to the property you’re interested in. These comps should be similar in terms of location, size, condition, and features. Comps plus an independent home appraisal from your lender will provide you with the market value of the home you are seeking to purchase.

No matter what your price point is, set a budget, stick to it, and try to avoid purchasing any home at its peak.

Economic Environment

While it may be tempting to buy a home in an economic downturn, especially if mortgage rates are low, an unstable economy can bring financial uncertainty.

No matter when you choose to buy a home, make your purchase at a time that fulfills your immediate needs and future aspirations. That way, you can take comfort in knowing you bought your home at the right time for you.

First time buying a home?

We’ve got you covered with information about first-time home buyer mortgage options.

Learn More

Once you decide that it’s the right time for you to buy a house, these steps will guide you from house hunting to moving day.

  1. Engage a Trusted Realtor – Finding the right realtor is the first step to finding the right home.
  2. Get Pre-Approved – Complete an assessment of your financials so your lender can determine the amount of money they are willing to loan you to buy a house. The terms are put in writing and are typically valid for 60 - 90 days. You can learn more about the pre-approval process in our article, How to Get Pre-Approved for a Mortgage.
  3. Present an Offer – Know the maximum price you’re willing to pay for the house, offer less, and leave room to negotiate. Your realtor will submit your offer to the seller with your pre-approval letter.
  4. Start the Mortgage Process – Work with a Jovia mortgage specialist to evaluate the mortgage options available, including rates, terms, fees, and closing costs.
  5. Conduct a Home Appraisal – Your lender will schedule a home appraisal to estimate the value of the property and ensure you pay a fair price.
  6. Hire a Real Estate Attorney – Hiring an attorney that specializes in real estate will help make the home buying process easy.
  7. Attend the Closing – Review the paperwork with your real estate attorney and sign the documents. Then grab the keys to your new home.
  8. Move-In – Congratulations! Time to unpack and enjoy your home.

Home Buyer Mortgage Options

Jovia has mortgage options available to help bring the dream of owning a home to reality. Our trusted mortgage loan specialists will guide you through the mortgage application process, explain the terms available, and will provide individual options to meet your needs.

Ready to get started? Apply today in 15 mins or less!