Should You Try to Time Your Home Purchase?

You’ve found a house you love at a price you can afford. You are being quoted a reasonable mortgage rate. But it could be a bit better. Should you go ahead and buy the home, or should you wait?

It can be a challenge to answer this question, and there isn’t a “one size fits all” best choice. In most cases, the right answer is to move forward with the purchase, but not all. Let’s go over the possible advantages of trying to time the home purchase versus the risks you are taking by putting off the purchase.

Possible Benefits of Waiting to Buy a Home

The main reason people wait to buy a home is because they are hoping that interest rates will drop, and/or that they can qualify for a better interest rate by taking some steps to improve their credit scores.

Even a small drop in interest rate could save you $50+ on your mortgage every month, depending on the scenario (maybe a little more or a little less).

That adds up over time, so there is some logic in trying to wait. Sometimes, it pays off.

Risks of Trying to Time Your Home Purchase

But here’s the thing putting off buying a home while you try to time the market or wait for your score to improve is risky.

You don’t know what interest rates are going to do. You can try to make predictions, but there are so many complex economic factors at play.

Especially these days, we are looking at massive volatility in terms of global events. These events can destabilize rates.

So, you could find yourself waiting in the hopes of saving $50 a month, only to find that rates have dropped, and you are now looking at an increase of $150 instead of a decrease of $50.

In this way, it is a little like the mistake of trying to time the stock market. People do this all the time, putting off buying until they think they can do it during a dip. Most investors are better off not trying to time the market though. Time in the market is superior to timing the market.

The same applies with housing as an investment. Timing rates can be hard, and can easily backfire. But your time in the market is important. The sooner you buy, the sooner you can start building equity, and the more time that equity will have to grow in value.

Our Advice: Take a Good Deal When You Find One

So, what is the bottom line? There may be scenarios where it is worth it to wait to raise your credit, or when you have really strong confidence in rates dropping soon. But in most contexts, when you have a good deal in front of you, it is wisest to take it. That way, you do not miss out on your chance if rates suddenly turn against you.

Plus, if this is your dream home, it isn’t going to stay on the market for long. Waiting might mean losing it forever to another buyer. Moving quickly on it is your chance to build a life you love in a home you cherish.

Buy a Home in Missouri or Beyond

If you have questions about timing a home purchase, or you want to move forward with a mortgage application, McGowan Mortgages is here. We can help you buy a home or refinance in Missouri or 40 other states quickly and easily. To get started, please give us a call at (816) 631-9687 to schedule your consultation.