Should You Buy A Home In 2019?
Buying a home is one of the most important financial decisions a person will make. Deciding to buy a home comes down to individual circumstances. Are you starting a family? Do you have a steady job with prospects for advancement? The advice of an independent financial advisor can be helpful.
A key rule of thumb is to keep your debt-to-income ratio as low as possible. To get a qualified mortgage, the Consumer Financial Protection Bureau demands a total debt-to-income ratio below 43%.
Does it make more sense to rent or buy a home in 2019? The home price-to-rent ratio compares the value of a home vs. what it could rent for over a year. In San Francisco, Los Angeles, New York and Seattle, top-tier cities with few homes on the market, the price-to-rent ratio is far higher than in places like Houston or Atlanta. If you live in a pricey market but no longer want to rent, consider buying a home where they are affordable. A recent trend has been millennials moving out of city apartments to buy homes in the distant suburbs or cheaper parts of the country.
Other key objectives when buying a home include having enough money for a deposit, getting preapproved for a loan and checking your credit score. Make sure that any potential home to buy is somewhere you are willing to live for the long term. If you have or plan to start a family, consider the quality of local schools.
Also, hire a trusted real estate agent. Real estate agents can help you find a home to buy and negotiate the price. But remember, it’s ultimately your decision.
Should You Sell A Home In 2019?
If your home no longer matches your lifestyle, perhaps due to family changes or employment prospects, you may be ready to sell your home in 2019. Forget about national housing market trends. If you’re thinking about selling a home, you want to know if there’s buying demand in your area. That’ll determine how much you can reasonably expect to sell your home for. Keep in mind that you likely will have to pay a real estate commission of around 6% of the sale price. Buyers also may ask for the seller to cover their closing costs.
Also, if you sell a home, you’ll need a new place to live. If you’re upsizing to a bigger home, make sure you have enough equity in your current property to afford the next one.
Sellers should also complete any half-finished remodeling or repairs.
Expert Advice For Homebuyers
If you do want to buy a house in 2019, set a budget before property hunting.
“It’s incredibly important to make sure that you’re taking on a payment that can be sustained over the long haul,” MBA’s Fratantoni said.
But that budget shouldn’t just include a down payment and money to cover mortgage payments, property taxes and expected upgrades. Make sure to have enough cash in reserve for large unexpected expenses. Examples include dealing with a broken-down furnace, a gutter that needs replacing or repairing broken-down appliances.
“Have that budget in place and make that determination of what you can afford before you go shopping for a home,” Fratantoni said. “The problems really come along when someone falls in love with a home and tries to figure out how they can finance it. It’s a much better move to understand your budget before you go shopping.”
Failure to understand what you can realistically afford leads to problems down the line and can even end in foreclosure.