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This is a Great Time to Buy a House, lf….

August 28, 2011

…it is a great time for you, in your current situation, and with your future situation taken into account.

We recently had a house built, and it was a great experience (most of it) and we feel really good about our house, neighborhood, and monthly payment as well as the payoff amount (and equity) on our house. Part of that has to do with the favorable market conditions for those who are looking to buy a house. But…not so fast…

First off–and what spurred this post–you ought to check out this post at Moneyning.com. Just because your current state of finances looks good, doesn’t mean everything will fall together easily when it comes to qualifying for a mortgage at a great rate. Don’t despair, it isn’t so bad, but this article will give you a few things to think about. By the way, Moneyning.com is a great, great personal finance blog…

The article just got me thinking about some things a person ought  to consider if buying a house is an option right now. One thing to consider is your current financial state…which we’ll not talk about right now. Your lender will talk to you about that, so I won’t. But–and this may be a much bigger deal–you ought to seriously consider what the next 5-15 years of your life are likely to look like, financially. Here are some things they you may want to consider…

  1. Is my income steady? I know my current paychecks can more than cover our new house payment, but will I be getting paid more, less, or the same in a year? What about 5 years?
  2. Is my job safe? Is my company currently laying people off, or hiring? How confident am I that I will be working in 5 years?
  3. What things are likely to change in our five year future? Any children on the way? That will change a budget. Will our teenagers be driving in a few years? More insurance payments, gas payments, and possibly another car payment (though most 16-year-olds don’t need a car that couldn’t be paid for with cash). Will there be any new monthly payments showing up in the near future? Will I be getting a raise? Will my spouse be changing their employment status over the next 5-10 years?
My  goal isn’t to talk you out of moving, buying, or building right now. In fact, with interest rates as low as they are, I can’t think of a better time to do it. And having a budget and tracking your spending will help you answer these questions, and many more that you ought to consider. If your lender tells you “With your income, you should be able to make this house payment just fine” there are always, always, always more things to consider before you make a big change in your financial life…Once you’ve considered all of the questions regarding your future, you’ll feel a lot more confident in your decision.
Can you think of anything else someone ought to consider before moving houses, buying a house, or building a house?
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