Even though the costs of homeownership are on the rise as home prices and mortgage rates increase,
more consumers say it’s a good time to buy a home. AJ Smith, vice president of financial education with personal finance website SmartAsset, offers three tips for helping buyers determine whether now is the right time for them to purchase.
- ‘Right now’ is not always the right time: Prospective buyers may feel pressure to buy a home before interest rates rise even higher, but it’s important to encourage your clients to look at their personal financial situation. Depending on the local market and factors such as how long your buyers plan to stay in the home they buy, renting in the short term can actually save them more money in the long run. It’s a good idea for buyers to crunch the numbers before deciding whether now is really the right time to buy.
- Be mindful of your clients’ number: It’s critical to help your clients understand how much home they can afford before diving in. Your business is all about managing client expectations, so have a realistic conversation about what your buyers can truly spend in order to stay in their budget, and then shop for a home based on that number—not just what’s available.
- Monitor how mortgage rates affect your clients’ monthly costs: As long as rates are on the rise, the cost of getting a mortgage will be, too. Using a mortgage calculator can help show how much even a slight change in rates will affect your buyers’ projected monthly payments for the life of their home loan.
Source: AJ Smith, vice president of financial education at SmartAsset
