Is Now a Good Time to Buy a House?

a Good Time to Buy a House

The real estate market is a bit complicated given the current climate and if you’re not financially prepared for the process, it can be a hassle. Surprisingly, home sales are at their highest right now and have risen by 23% compared to last year.

However, prices are sky high and it’s safe to say that there are a lot of people ready to pay any offer laid on the table.  Even though prices are rising, it’s still important to consider all the factors before deciding that it’s a good time to buy the house.

The Good

Let’s first take a look at what advantages buyers can expect in the current real estate market.

Mortgage and Down Payment

Estimates by industry experts indicate that mortgage rates are likely going to remain low. However, the also claim that, even though the interest rate remains low, homeowners should not try to save on the down payment.

It can be very tempting to try and put down a minimal down payment while relying on the interest payments. However, by putting 10% down, paying the interest payments becomes a lot more manageable.

The Bad

Here are some of the challenges that buyers face under the current market conditions

Risk-Averse Banks

While the conditions may seem favorable for buying a house, banks are being extra cautious in this moment at time. Their cautious nature means that they’re becoming a lot more stringent with mortgage approvals.

It can be a tough time for people wanting to buy a house with smaller down payment as most buyers are coming in with ready cash. Banks will also tend to favor clients that are making a larger down payment as it’s a risk averse strategy.

High Competition and Prices

Not only are banks being stingier, the current market is one where the demand for homes remains high and the supply is low. That essentially means that the market currently favors seller.

The difference in demand and supply, also mean that the price of the homes goes up significantly. Not only are there very few houses on the market, the ones that are for sale will cost quite a significant sum!

What to Consider Before Buying a Home

It’s important to take into consideration your own financial situation before making the leap and buying a home. There are three key questions that every homeowner needs to ask themselves before investing in a house.

Are You Ready To Put Down Your Roots?

Buying a house essentially means that you’re going to settle down and live in the place for a live. Take into consideration your current lifestyle, relationships, and goals before moving into a new location. The ideal situation is you’ll live in a house long enough for the value to increase and offset the costs of buying and selling.

How’s Your Current Financial Situation?

Before making the major move, it’s essential that you asses your current financial situation. That means taking a look at your savings, credit score, and debt. Find ways to generate extra income. If they’re all in a healthy position, then you’re in the right position to buy a house.

Is Your Job Secure?

Lastly, once your mortgage application is approved there’s no going back. You’re going to need to make the monthly payments otherwise you’d default. That’s why it’s crucial to assess your job security before making any attempt at investing in a house. If you can see yourself working comfortable for the next couple of years, only then it’s a good idea to buy a house!

Summary

Buying a house during this time isn’t impossible or a big deal if you plan smartly and organize your finances in a proper way. You shouldn’t only look at the market but analyze your own financial situation objectively before trying to buy a home.

Related Reading: 5 Tips for Budgeting Together as a Couple

4 Ways to Help You Boost Your Retirement Savings

Boost Your Retirement Savings

Planning for retirement is something that anyone can do. Whether you’re a fresh graduate who just landed their first job or a long-time worker nearing retirement, you should boost your retirement savings. If your company offers a 401k, you’ll have accumulated a decent chunk of change over your career that you can cash out upon retirement. However, if you want to maintain your current lifestyle after retirement, you’re going to have to do a bit of planning. and self-moderated retirement investment while you’re still of working age.

Here are 4 ways to help you boost your retirement savings so you can retire in comfort.

1. Set a final goal and milestones along the way

It doesn’t matter what you’re working toward, you’ll get the best results if you know exactly what your goal is. Just saying you want to boost your retirement savings isn’t enough.

First, come up with a number that you think will allow you to live in comfort after retirement. It’s alright to use your current cost-of-living as a yardstick. You just add or reduce as you think is necessary for the quality of living you’re aiming for post-retirement.

The next step is to calculate how much money you need to put aside each month to reach that goal by the time you retire. If you’re planning on retiring early, you’ll have to put a lot more money into your savings every month. Experiment with the calculations until you find an amount that you can afford to save every month that won’t drastically negatively impact your quality of life today.

2. Start saving as early as possible

Due to the way compound interest works, it’s best to start saving as soon as possible. For example, a 25-year-old who puts in $50 a month will have roughly as much money saved up by retirement age as a person who puts away $100 a month in savings but started at 35 years old.

If you’re already putting some money away every month in a retirement account, stick with it! Consistency over time is key to achieving your retirement goals and boosting savings. And if you haven’t started saving, do it now! Every day you put off not opening a savings account will increase the money you have to invest each period in order to reach your retirement savings goal.

3. Save your extra funds

In life, there will be times when you’ll find yourself with some extra money. Whether you’ve received an inheritance or just got a raise, don’t forget to stash extra funds into your savings. It can be tempting to splurge that extra money on something fun and fancy. Try to put at least half of it away in your retirement savings. Treat yourself with something small and affordable. If you just got a raise, then go ahead and spend some of that extra money on something nice. Just remember to always work toward your retirement goal.

4. Delay your Social Security payment as long as possible

In America, you’re qualified to start receiving your Social Security retirement benefits from the age of 62. However, the longer you delay pulling from your Social Security savings, the more money you stand to earn.

For each year until the age of 70, your monthly benefit from Social Security will increase. If you’re able and willing to continue working past 62, every year you delay retirement will significantly affect your total benefits from Social Security. This also means greater survivor benefits for your spouse, which is another key factor to keep in mind when considering retirement.

Related Reading: How to deal with debt in retirement