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Reasons to Delay a Home Purchase

Assuming you have the financial resources and the desire to eventually own your own home, there are a few good reasons to put off the purchase.

The main thing a buyer wants to avoid when buying a home is being put in a position where the home needs to be sold too soon. If a home is sold before it has appreciated enough to cover the costs and commissions of selling, the seller could be in a financial bind. This is especially true for those who buy a home with a down payment of ten percent or less and have adjustable rates.

Real Estate commissions can be approximately six percent of a home’s sales price, although commissions are negotiable. The seller’s closing costs generally come to approximately one and a half percent, depending on concessions (i.e., contribute to buyer close costs, etc.). This can easily exceed the first year’s appreciation. With a minimal down payment, a seller could actually have to come up with cash out-of-pocket to sell his home.

New to the Area

Another good reason to put off buying a home is a move or transfer to a new city or region of the country. It makes sense to rent for a number of months before deciding on exactly which neighborhood or suburb would best fit a person's commute or lifestyle.

Uncertain Job Future

A buyer right out of college or a person expecting a promotion and a transfer may have some future uncertainty. If a company has announced an impending "restructuring," happening often today, may provide instability. If any of these apply, it might be in a buyer's best interest to wait to buy a home. When there is a more accurate picture of what your next few years will be like, then that will be the time to contact Kate. She also can send you properties and updates on areas you have interest while you weigh your options.

Credit Troubles

While this seems like a no-brainer, many people can be approved for a purchase up to a certain amount with a 650 credit score. (They may also pay a higher interest rate.) However, consider where you want to live and what the prices may be in that area. Wouldn't it be wise to increase that credit score? There are credit counselors and a number of ways you can do your own credit clean-up. For example, close a line or two that is extended in your name you will never use, usually at least a year prior to a home purchase. Or start paying your credit card bills down and on time. If you need a resource for credit advice, give Kate a call and she can refer someone for you.

Down Payment

Do you have 10-20% down payment? Today's lending standards have changed and if you do not have 20% down, you will be charged mortgage insurance, making the house payment around $200 or more higher. With a 10% down payment and good credit, you can usually get a good interest rate. Again, it's a good idea to talk to a lender for ideas on improving your credit score and saving for a down payment. Kate has qualified lenders she can refer to you.

Contact me today!

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