Is Now a Good Time to Purchase a Second Home?, #164

Retire With Ryan

With home interest rates recently hitting 20-year highs, you may wonder if now is a good time to purchase your retirement home or a second home? On this episode, I'm going to discuss what you should consider before signing on the dotted line and making such a big commitment.

You will want to hear this episode if you are interested in...

• The current state of home interest rates [1:38]
• Is NOW a good time to buy? [3:00]
• How do you finance the purchase of a second home? [4:37]
• Things to consider before starting the home-buying process [6:41]

What’s going on in the current housing market?

To understand whether or not now is a good time to buy a second home, we need to look at where home interest rates are at. Currently, these interest rates are the highest they’ve been in 20 years. This means anyone looking to take out a mortgage will pay around 7.6%, as opposed to the roughly 3% rate from three years prior for a 30-year fixed mortgage. While those numbers may seem startling to some, rates around 8% and higher were fairly common in the past.

Another factor to consider before buying a second home is the availability of housing. Those stellar 3% interest rates from a few years ago caused quite the housing boom across the country. There's a short supply of homes to buy because many people have refinanced or purchased a home in the last three to five years at a much lower interest rate. So it’s possible that finding the perfect house in the current market could be quite a chore.

Are YOU ready to purchase a second home?

So is now actually a good time to buy? You’ll have to listen to this episode to find out! But before you do, there are a few questions you should ask yourself to determine your readiness to buy a second home. The first is, do you have enough for the down payment? Buying a second home usually requires a down payment of 10% or more. You also want to shop around for different lenders. Talk to multiple lenders to compare the packages and interest rates they offer.

Another great question is if you have time to apply for a mortgage? The process is tedious and requires a lot of documentation, including pay stubs, tax returns, and investment reports. All in all, the process can take up to 10 hours for simple applications. The more complexities in your situation, the more time it will take to complete the process. Hit play now for more on buying a second home!

Resources Mentioned

• Retirement Readiness Review
• Buying A Second Home, #12

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