The last couple of years have certainly been a little crazy for the housing market. We’ve seen low rates, high prices, and less volume on the market. It’s been easy to sell but tough to buy which makes the decision of purchasing a home all the more difficult. Here are three things to help you make that decision from the team at GVC Mortgage.
Rates & Prices
First and foremost, how much is the house going to cost, and can you afford it? Mortgage rates have been low, generally under 4%, so far in 2022. However, those rates are expected to begin rising. Be sure to work with your mortgage lender to have a good understanding of what your monthly payment will be once you’re all in on price, rate, taxes, etc.
Credit & Debt
Part of what factors into your rate is your credit score. Generally speaking, a credit score of above 740 will qualify for the best terms. It is, however, still very possible to qualify for a mortgage with a score in the 600s, but you may end up with a higher rate. Additionally, your debt will play a factor in how much you can borrow. Lenders will take a look at your debt-to-income ratio, how much you earn each month versus your monthly expenses such as car loans, credit card debt, student loans, or other personal loans. Lenders prefer a DTI of under 36%.
Length of Stay
Lastly, how long do you plan to stay in your new home? If it’s less than five years, you may consider holding off on purchasing until you’re ready or able to commit to a longer term. This will help ensure that your property value will increase along with the equity you have in the house. That way, if and when you do need to move you’ll have enough to cover the cost of buying and selling another home.
If you’ve considered everything and landed on buying a new home, GVC Mortgage is here and ready to help. Located in Carmel, Indiana, we can also assist with a refinance if you’re not ready to make the jump. Contact us today at (317) 564-4906 to go over your options.