Mortgage Applications Decline - Is It The Right Time To Buy?

Before you start shopping for a new house, its important to consider the state of the housing market today

. According to recent Reuters research, home mortgage applications recently dropped as the demand for refinancing declined for the fourth consecutive week.

Nonetheless, all hope isnt lost. Recent statistics have confirmed that the housing market in the US continues to improve, partially thanks to the announcement that the US Federal Reserve will begin a third round of quantitative easing to boost the economy as a means to reduce home loan rates and encourage more homeowners to refinance.

Is It Smart to Buy a House?

To wade through all of the convoluted real estate jargon and address the burning question of whether or not its the right time to buy a home, the answer is complicated at best. Some experts believe that the market has never been better for potential buyers, while others anticipate a prospective drop in the near future.

In order to make the wisest decision as a soon-to-be buyer, its important to assess the housing market in your city, as well as your neighborhood of choice. Although housing prices have declined throughout the nation, that doesnt necessarily mean that they have dropped or will drop in your local area. On the other hand, housing prices could decline significantly in your city and leave you in a sticky situation when buying a new home.

To determine if its the right time to buy, consider the following questions:

Do you have a good job with a steady source of income?

Have you saved enough money for a housing deposit and closing costs?

Do you plan to stay in your home for five years or more?

These basic questions will shed light on whether or not you should stay put or consider buying a new home in your area. Of course, your situation may dictate that you need a new home as quickly as possible without any wiggle room. For example, your spouse may be pregnant with your third child, and you may need a larger home with an extra room to accommodate a growing family.

What to Consider When Buying a New Home

After taking into account your personal situation and the state of the housing market in your area, you can make a better decision about buying a new home in the near future. But before you sign on the dotted line and close on your dream house, its important to take into consideration the amount of your new mortgage compared to your current mortgage or rent.

For example, if your mortgage will be increasing by roughly $500, practice setting this money aside for several months to see how it weighs on your finances. If it feels like a stretch to increase your household expenses by a whopping $500, you may need to consider a cheaper house or refrain from buying altogether.

Last but not least, dont forget to account for extra expenses that are necessary to keep your home in the best condition after buying, like homeowners or renters insurance in Austin, property taxes, and routine maintenance.

by: Leslie R. Wright

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