If you are shopping for a home right now, you are no doubt aware that we are entering a time of great economic uncertainty. Rather than spending this article trying to predict the future, let’s share some recommendations that are good to keep in mind when you are choosing a home and a mortgage and don’t know what tomorrow might bring.
- Consider possible income changes. Hopefully you are in a field where you have relative job stability. There have already been a lot of big changes in the world of employment and job-seeking recently though. With continuing shifts in the worlds of business, economics and technology, there will be more changes ahead. Predicting the exact nature of those changes right now would be challenging. For that reason, it is wise to plan ahead. Make sure that you are purchasing a home you will still be able to afford if there is any drop in your income in the future, as may happen if you spend time between jobs.
- Buy a property with rental potential. Another smart move when shopping for a home during uncertain times is to pick a property that could boost your income. For example, maybe you find a single-family home for sale that has an ADU in the backyard. If you need to supplement your income in the future, renting out the ADU would be an option. While there are a lot of things we cannot predict, we can reasonably guess that the demand for rental properties over the next few years will stay the same, or increase.
- Lock in a low interest rate if you can. Even though economic uncertainty can present challenges, it also can present opportunities. If we enter into a recession, interest rates can be expected to decline. If the recession is not affecting your ability to buy a home, that actually can be an opportune time to do it. You will have a chance to lock in a low rate. Why choose a fixed rate instead of an adjustable rate? While rates may keep dropping for a while as a recession deepens, they are not guaranteed to keep falling. In fact, economic recovery would be accompanied by rates increasing again in the future. In that scenario, you will be glad that you locked in a fixed, low interest rate when the opportunity was available to you.
We Can Help You Buy a Home
Shopping for a home during a time of economic uncertainty has potential pitfalls, but through careful financial planning, you should be able to avoid them. Moreover, you can take advantage of the opportunities presented if interest rates end up decreasing. This may help speed you along toward your financial goals.
If you are ready to buy a home, or if you would like to refinance, please schedule a consultation. We can help you in Missouri or 40 other states. To get started, give us a call at (816) 631-9687.
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