Experts are always trying to tell us when it’s the right time to take action. There’s always a right time to work out. A right time to eat your food throughout the day. There’s always a right time to shop for certain things. And, of course, there’s also always a right time to invest in real estate and to purchase a home. Let’s take a step back for a minute on that last one. Is there really a “right time” to purchase real estate?
Ultimately, it comes down to not only the real estate market, but also your personal situation and where you are at in life. Before you purchase your own piece of real estate, below are six things you need to consider before making the decision to invest in real estate:
1. Income Stability
How stable is your income? When your company or business is doing well and you’re making lots of money, it’s very easy to get excited and feel the desire to buy yourself a piece of property. The question that you need to seriously address here is: “How stable is this income?” What’s the likelihood that your income will remain the same or increase in the next six months? What about the next year? If you’re unsure of your future income situation, then picking up a mortgage isn’t the brightest idea at the moment. You’re going to want to wait a few months until you have a clearer picture of your future earnings or you’ve at least built up your savings a bit more.
2. Your Credit Score
This will determine what interest rate you’ll obtain on your mortgage if you get approved. A few points up or down on your interest rate can be the difference between thousands of dollars over the lifespan of your mortgage. Make sure that your credit score is where you want it to be before you even apply for a mortgage. If it’s not, then you need to start thinking about ways to raise your credit score.
3. Life Situation
Are you single at the moment? Are you in a long-term relationship? Your life situation can change in a few months or overnight. Your company can offer to transfer you to a warmer part of the country. You might get the instant urge to quit your job and travel to Europe for a year. We all have different life situations. This is why there is no one-size-fits-all advice when it comes to buying real estate. Make sure that buying a piece of real estate fits your situation.