Is This The Best Time Ever to Buy a House or Nah?

Photo credit: Khadija Horton
Photo credit: Khadija Horton

From Cosmopolitan

If there’s one thing my mama taught me, it’s to always look for a silver lining. And right now, there (shockingly) is one: Mortgages are more affordable than they have been in a looong time. I hate that it took a pandemic for us to get here, but if being able to actually buy a place of my own is even a remote possibility, it’s not one I’m going to sleep on. Which is why I’m out here reporting this little article for me all of us.

The good news: The two-bed, two-bath you’ve been eyeing might legit be a reality. “A major pro of purchasing a home right now is a lower mortgage interest rate,” explains Institute for Economic Research Studies founder Yolanda Michelle about one of the ways the government is attempting to stimulate the economy. Less interest means you’ll have to pay the bank less money in the end.

Now for the reality check: Unemployment is at an all-time high, and almost no one who’s lucky enough to still have a job is immune from pay cuts or layoffs, so it’s not *all* upside out there, says Fenaba R. Addo, PhD, associate professor of money, relationships, and equality at the University of Wisconsin at Madison. Whether buying is right for you depends on if…

You have 20 percent of your dream pad’s purchase price ready to go for a down payment (so if the place costs $200,000, you’d need $40,000 in cash). And enough savings to live for eight months if you suddenly lost your job, says personal finance expert Suze Orman (that’d look like around $24,000 if you make $3,000 a month). Anything less and you’ll struggle if your new sink explodes or you lose some income.

And you make enough to pay your mortgage, property taxes, and home insurance after you settle in without dipping into said savings, says Orman. Use an online tool (she has one at to calculate your monthly mortgage payment, then add on 45 percent of that number. So if you get a 30-year mortgage with a 3 percent interest rate on the aforementioned palace, you’d pay $675-ish a month; 45 percent of that is about $304. Add them up and you get $979. If you can swing that much each month and still have enough for general life stuff, you’re set. No? Keep saving.

And and your FICO score is 760 or higher. This is kind of like a credit score that tells lenders how well you manage debt (aka if you’re trustworthy enough for them to loan a bunch of money to). It’s possible to get a mortgage with a lower score, but banks reward fiscally responsible folks with better interest rates, which, reminder, is what you want.

And here we are. If you’re nodding, you might be in a position to jump on the discounts. If not, well, at least you have this plan.

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