Many people dream of moving out of their parents’ house or their own apartments and into a property they can call their own. Moving into your own home affords you the freedom to live as you would like—no longer do you have to ask permission from a landlord to paint a room or make any changes or improvements. The home is yours to decorate and renovate as you choose. In addition to lifestyle freedom, purchasing a home can often be an investment in your future as once it is paid off, it can provide you with additional equity.
Current Mortgage Trends
International mortgage trends reveal that consumers worldwide are eager to jump into the housing market but are a bit nervous about the worldwide economy and their own personal finances. While it is prudent to make sure you are financially stable and able to afford a mortgage payment, the current economic environment is clearly in favor of the home buyer with low mortgage interest rates and housing purchase prices that are lower than they have been in years. The market will not stay like this forever, so jumping into the housing market as soon as you are financially able to afford it may be a smart move.
Why Mortgage Insurance?
While traditional wisdom is to wait to buy a house until you have the full 20% down, that number can be out of reach for many. If you are purchasing a $200,000 home, you will need a full $40,000 for the 20% down payment in addition to money available for closing costs. However, if you don’t currently have that money available, you can still take advantage of the current buyers’ market. Buying mortgage insurance will help you be able to afford a home if you have less than 20% down. Simply put, buying a home today is smarter and safer with mortgage insurance. Not only does mortgage insurance help protect the bank in the event you default on your loan, it helps you enter the market with a smaller down payment.
Are You Ready to Buy a Home?
Of course, when buying a house, make sure that you have a healthy emergency fund to cover any unexpected costs such as a refrigerator or a roof that may need to be repaired or replaced. In addition to the emergency fund, it is important to set aside money for yearly property taxes or have the amount rolled into your monthly mortgage payment.
If you feel you are financially ready to buy a home because you have a healthy emergency fund, money for taxes and money for your monthly mortgage payment, there is no reason to wait a few years until you can gather enough money for 20% down. No one knows what the market will be like a few years from now, but there is no denying that housing prices are currently low and interest rates are at historic lows. The only place for these numbers to go is up; we just don’t know when. If you would like to enter the housing market now, mortgage insurance can help.
Guest post by Melissa