When is the right time to buy a house?

When opportunity knocks, open the door. 
Why waiting to buy a home could really cost you.

Although purchasing your first home or deciding to upgrade to a new home is a major decision, taking too long to make the move could cost you. Here are a few things to consider before deciding to jump into the home-buying pool.

Costs of renting - If you are renter, consider how frequently your Landlord will raise your monthly rent. A fixed rate home loan will ensure that your monthly principle and interest payments stay the same, making budgeting more predictable. If you itemize deductions on your income taxes, you may be able to partly subsidize your housing costs with the associated tax benefits of owning a home. Ask your tax advisor about including your mortgage interest in your itemized deductions.

Rising prices and rates - Waiting for a reduction in listing price or mortgage rates to fall could backfire for homebuyers. The market is constantly changing and while you wait, home values may rise and mortgage rates may actually go up several basis points. Or worse, both the home’s price and interest rate could increase adding several hundred dollars to the monthly mortgage payment.

Down payments and PMI - For many years, lenders required down payments of 20% or more in order to qualify for a mortgage.  The advent of Private Mortgage Insurance, aka PMI, which is an insurance policy paid by the homeowner that protects the lender should the borrower default on the loan, helped to reduce the sizable down payment requirements but it did add a new monthly insurance payment that adds to a borrower’s costs.  Waiting to save the recommended 20 percent to avoid the monthly PMI cost can take a substantial amount of time, all while home prices and mortgage rates may rise, which can make purchasing a home even more unattainable.

There are now specific loan programs, such as APGFCU’s 80/20 loan, which can help buyers finance their home with little or no down payment, and require no PMI. This loan allows buyers to finance 80 percent of the purchase price on a first mortgage and 20 percent of the purchase price as a second mortgage, for 100 percent financing. 

APGFCU also offers conventional loans requiring as little as 3% down, as well as low down payment FHA and VA loans to qualified borrowers. FHA only requires 3.5 percent for a down payment, while veterans and members of the military can qualify for zero down payment through a VA loan.

Learn more about our Mortgage products. Ask an APGFCU mortgage lending expert. Call 888-LOAN-391.

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