Even during the best economic times, it can be hard to feel fully confident in being ready to buy your first home. There’s a lot to consider. You want to make sure you have enough saved up for a down payment, enough put away for homeownership expenses, and you have the pressure of a very important, long-term financial decision on your shoulders. 

So what about when interest rates are higher than you anticipated or when there’s the anxiety of larger economic concerns? How can you feel confident that now is the right time buy for you? What should you consider, and what are good indicators in your personal finances? 

We will cover how you can approach making a decision on whether now is the right time to purchase a home, given your individual financial situation. Let’s get started! 

Good Indicators Now is the Right Time to Buy for You 

Given our current market conditions, where mortgage interest rates have risen over the past year, and even industry experts are split on whether or not they’ll continue to rise in 2023, many would-be buyers are making the call to sit on the sidelines and wait it out. 

But interest rates aren’t the only factor that you should consider. You should also factor in your financial vitals into your decision-making. Do you have money saved up for a down payment? Is your credit score in the range to qualify for loan programs? What does the inventory situation look like in your area? 

You’ve Saved Up for a Down Payment 

If you already have a significant amount saved to cover your down payment and still leave you feeling comfortable to tackle any homeownership expenses that may arise, then that’s a tick in the “buy now” column. 

Remember, you don’t have to make a down payment of 20%. There are several loan programs that allow you to put down much less than that. 

Your Credit Score is in Good Shape 

Have you been hard at work ensuring that all of your payments are made on time and keeping other parts of your credit profile in check? If your financial vitals are in a good place, that’s another reason to add a checkmark to the “buy now” column when you’re weighing your decision. 

Your credit score, and other aspects of your financial situation, such as your income and job security, should play a central role in making the decision to get serious about buying now. 

Inventory is Moving Slowly or is Low in Your Area 

In many markets, homes for sale are sitting on the market a lot longer than they were just six months ago. This can equal big savings and a good deal for you as a buyer. Some sellers may be patient and wait for a buyer to give them their asking price, but many will lower their price to make the sale happen. 

On the other end of that spectrum, in some markets, inventory continues to remain low. While you might not feel that you’re getting as much of a deal as other buyers, you don’t want to miss out on a house that really fits you and your family’s needs. 

Reasons Buyers are Deciding to Wait to Purchase a Home 

While there are good reasons first-time buyers are still deciding to move forward with purchasing a home right now, there are also valid reasons you might want to wait to buy.

Interest Rates and Economic Outlook 

The major hesitation we all hear about in the news is that interest rates are higher than they have been for quite some time, and there’s fear of a recession

These are certainly valid concerns and should play a role in your decision-making process. But that role should be equitable to the other factors you’re considering – meaning that they shouldn’t overtake positive indicators that you’re ready if those outweigh the negatives of our current market conditions.  

If you’re otherwise ready to purchase your first home, and interest rate is your only concern, there are loan programs that can help bridge that gap, such as a 2/1 buydown or an adjustable-rate mortgage

You Want to Continue Building Your Savings 

Regardless of what the market is doing, savings is always an important factor that every buyer needs to consider when planning to buy a home. 

You’ll want to have enough saved up for your down payment and closing costs, so it’s a good idea to speak with a loan officer to get an idea of what those numbers are based on the loan programs you’re likely to qualify for and use to buy your home. 

In addition to the upfront costs associated with your mortgage, you’ll also want to have enough money saved to cover both normal and unexpected homeownership expenses. This ranges from periodic upgrades to unpredictable emergencies that can occur. If you have cash set aside for this, it will make it a little less stressful if it happens. 

How Can You Be Sure You’re Ready to Buy? 

Even now that you have an idea of the reasons to move forward with buying and the reasons it might be better to wait, you might still need help putting it all together. 

We encourage you to reach out to one of our expert loan officers, who will take the time to learn about your situation and give you the facts to make an educated decision. It’s never too early to start planning for your first home, even if you decide to wait until the timing is right for you. 

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The included content is intended for informational purposes only and should not be relied upon as professional advice. Additional terms and conditions apply. Not all applicants will qualify. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. This is an advertisement. Prepared 12/29/2022.