By Dianne Mosbacher
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June 23, 2022
With all the news stoking your fears, should you put off buying that house now? Or what about selling your house? What to do, oh what to do! The first thing is look around you - the nightly news is for the entire country, so maybe your area isn't having the issues the rest of the country is. Are you seeing a lot of home building going on in your area? Lots of empty building or deserted homes? Is your job (hopefully) secure in such times and do you have the funds to buy now. Assuming yes, lets move forward. House prices have been trending upwards rapidly but maybe they will slow down that rise a bit. Let's think this over and see what you might consider. Let's go with yes, let's buy a house now. First off, the home prices might have softened a bit but not likely that much. More likely the number of buyers per house has softened and that is in your favor as you won't be in a price bidding war. Also if the number of buyers has softened, then there will be less buyers so that opens up more houses for you to buy. Remember, houses come up for sale for many many reasons such as job changes, divorces, deaths, downsizing, upsizing, first time buyers and so on - so you can see that these things will continue to happen and houses will still come up for sale. The interest rate hike does hurt you in the sense that your monthly payment may be more but consider if you can get the house a bit cheaper than you thought, you save money and thus your monthly payment will be lower than you planned since you are not borrowing as much. Also consider if you are renting, those payments are going to go up and you are not getting any equity building. If you buy a house, you start building equity and can someday borrow back some of that money for any of a multitude of reasons. Consider it a safety net in many ways. Realize too that whatever rate you borrow at today, they may go up in the future and thus you saved by buying now before that rate hike or they may go down and you can simply refinance. Rates are not locked in forever, they are constantly changing both up and down. The news would have you believe that once they go up, you will never ever have a chance to borrow again at a lower rate . . . simply not true. Shop around for rates and offers from various banks and private companies and even government agencies that make mortgage loans. Today you have more choices than ever . . . shop around. Also watch out for "add-on" to your mortgage; check on what fees they might charge you or paperwork that might cost you more. These can inflate your costs and sometimes are not worth it, again, shop around! But sometimes, they are worth it and you can either pay those fees ahead or ask that they be added to your monthly payment. Don't just call the bank you have always done business with, they might not be your best option. Also there is the possibility that home prices may drop and that would seemingly be another bad fear. But think about it, if you live in that house for 5-10 years, it will surely go up in value and if you do some upgrades, it can go up considerably. So you still do better by purchasing a house today and building equity, having a home to call your own, and opportunities to do many other things. Of course, we wish the rates would not go up but when they do, the house purchase should not be put off, just shop around and find a house that suits you. Maybe you can buy a cheaper house now while building equity to be a stepping stone to your next "forever" home with the equity you build! The house you buy today does not have to be the only one you will ever own...it's just the beginning!