When you find yourself in that stage of life when you want to put down your roots and buy a house, there are several things you have to consider – from where you want to buy your house to your home loan eligibility and everything in between. You also have to consider if now is the best time to buy a place among all these factors. The timing of buying your house is an essential factor because it tends to determine your cost of borrowing and investment.
According to experts, the best time to buy a house is low when the home loan interest rates are. Currently, most of the major home loan lenders have lower interest rates between the range of 6.5% to 6.75%. Even a 1% decrease in home loan interest rates can amount to significant savings over the long term since your home loan tenure usually runs into decades. Now is the right time to buy a home, considering the interest rates.
While they are low currently, they are likely to rise. This is due to the higher fuel prices and inflation amidst geopolitical instability. The repo rate, which directly impacts the home loan interest rates, is currently 4%, which is the lowest since 2001. However, experts believe that the central bank will be increasing it soon, which, in turn, will lead banks to raise home loan interest rates.
Lower property values
While the housing market has been relatively resilient in the pandemic, and experts believe there could be a rise of about 5% in house values in 2022, home prices are still on the lower end. This, combined with the lower cost of borrowing, makes now a great time to buy a house.
Like with all other investments, the ideal scenario when buying a home is to buy it when the value is low and eventually sell it when it is high. While purchasing homes for personal use and living, you may not think of selling them, and you still would like to buy a home that appreciates over time and makes for a prudent investment.
The right time to buy a house
The best time to buy a house is when you can afford it and when you are in the right place to make such a huge commitment. While factors such as the housing market’s state and interest rates matter when deciding to buy a house and apply for a home loan, it boils down to when you are ready to afford a home. Your credit score should be good to get a reasonable home loan interest rate, you should have a plan in place to repay your loan, you should have a sufficient emergency fund, and look at other essential components of financial planning. You can check your home loan eligibility and housing loan interest rate by using helpful tools like calculators.