Real estate buying season is coming up soon. The housing market takes some thought and preparation to navigate no matter when you’re buying (it’s a big decision, after all), but when buying season hits, you need to be ready to move quickly and find what you’re looking for in a house. Taking steps to make that easier before you start shopping for your next home can make all the difference in your end result and your stress levels.
So how can you prepare?
Get the numbers straight.
You want to know your current situation and your future goals, then make plans that fit them both. Know how big your down payment can be. Look at mortgage rates and terms. Find out how much of a mortgage you can qualify for and what the details will be.
There are a variety of strategies out there, so this is something you want to research and hopefully talk to an advisor about. Finding the right method for you and your situation is important. It’s also important to look at what those numbers mean in the areas you’re considering and how that compares with what you want in your new home.
Taking your other needs and money goals into account is important, too. Do you have student loans to pay down? Other big goals to save for? Is your industry volatile? Are you planning on a fixed income? That all determines your best down payment amount and monthly payment sizes.
As an example, we looked for a lot less house than we qualified for because we were paying down student loans, and we wanted to be able to weather any career upheavals. We also did some research and were able to use the VA program for no down payment. Knowing those two things helped us narrow in on the right kinds of properties for our numbers.
Get Expert Advice
Getting advice from a financial advisor makes a big difference, like how we were able to find the VA program that helped us lower our down payment. You should talk to your advisor and other pros to find the best solutions for your situation and how a new home purchase can affect your other financial goals.
Here are some questions you can talk through together:
- Are you able to tap your 401K and how would that will impact the plans they’re helping you build overall? Is it something you should do? What rules do you need to know?
- Is now a good time for purchasing, based on the plans you have and the current market trends?
- Are there any creative options you could think about, like going to a lower-priced market and working remotely, if you’re able?
- What other things do they think you need to know or watch for?
Another thing you need to plan for is moving on from your current situation, whether you currently own or rent.
If you’re renting, your first question should be whether buying or renting makes the most financial sense for you.
This depends a lot on your rental costs, your house needs, and your timelines, all combined with the housing market in your desired area. You can test out a handy calculator to see what may make sense for you here, then talk to your advisor about the results.
If you’re pretty sure it’s time to buy, look at what your lease says. Can you plan your house hunt around the lease terms and timelines? If your lease is up at a time of the year you don’t want to buy, can you buy in a different season and sublease? Or would it make sense to break the lease mid-term and pay the difference?
If you own, what do you need to do to get your house ready to sell or rent?
You should also talk about different options like traditional selling, leasing, or even listing on a site like Selling Later (and take a look at their helpful guides to get ready to sell). If you’re debating leasing your current property out, make sure to look at all the angles with your advisors, from costs like broken water heaters to larger tax implications.
The Big Picture
Finally, while the details and numbers matter, don’t forget the big picture. What is going on in your life right now? Moving isn’t quick and it makes for a lot of moving parts. What’s on the calendar in the next year or two? When would be the best time to sell? What processes will make it easier? Who and what can help you with your specific needs?
If this advice has you thinking, take a few minutes to jot your ideas and questions down and share them (and this post!) with your financial advisor. And make sure to use Willowfinch’s tools to help you start planning out all the details.