If we are not in a real estate bubble, then we’re pretty close to the top of the home prices in the real estate cycle. Should you buy a home?
Making the right decision is about proper strategy, planning and execution. You can come out a winner in a real estate bubble.
1. Location – a home in a desirable area is less likely to decrease in value, because people always want the amenities that make areas special; like great schools, restaurants, low crime, walkability, tax rate and accessibility to jobs.
2. Diversify – you should not use all of your savings for a down payment for your home purchase, but the down payment should be part of your investment strategy.
3. Buy for the long-term – if you’re planning on having kids, make sure you purchase a home with the appropriate amount of bedrooms for the future.
4. Long-term financing – don’t get too tempted by the low adjustable rate mortgages. Get a low fixed rate. Over time, inflation will be your friend with a fixed rate mortgage, because your mortgage payment will be the same while everything else will increase – making your mortgage payments seem lower over time.
5. Don’t be scared of renting – it is better to overpay for one year of renting than 30 years of a mortgage.
If you have any real estate or mortgage questions, please contact me directly.