Real Estate

When Is The Perfect Time To Take Out A Home Loan

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Isn’t it everyone’s dream to buy a home someday? With the price of properties and land becoming more and more expensive each year, fewer and fewer people are having the capacity to pay for homes upfront. The good news is that mortgages help you buy homes without having to pay for it full price.

If you aren’t familiar with it yet, mortgages are basically loans that you take out when paying for homes. Loans are typically paid on a monthly basis in a contract that lasts for a few years depending on what’s approved. As long as you have good credit and a stable source of income, it’s very easy to take out a mortgage.

While it makes buying a home easier, mortgages aren’t really that practical. If you take a look at it in the long run, the total price you’ll have to pay for your home will be 5-10% more than the original. This is why it’s important that you perfectly time the moment you take out a loan.

With proper timing, you can potentially reduce the interest on your mortgage. Other than that, you can make the loan approval rate significantly higher as well. Here’s when the perfect time is to take out a loan for your home purchase.

Timing Your Home Loan

Believe it or not, the time you take out a loan matters as much as the time you buy a house. There are a lot of reasons why this is the case and it’s mostly affected by the condition of the housing market. Moreover, some financiers actually offer good discounts on certain times of the year as well.

According to a recent study, the best time to take out a loan is in January. As per the report, lenders usually offer a discount of at least 20 basis points as compared to the months of June to October. Surprisingly, the study finds that cooler weather often comes with better mortgage rates. 

As such, December to February are generally good months to take out a loan. People are more enthusiastic about getting homes during this period.

The study doesn’t specifically say why this is the case when it comes to mortgages. However, it is very likely that the reason why lenders offer better deals is because of the competition. In general, people tend to become more aggressive when it comes to buying a home during these times of the year as well.

As more people are looking to buy homes, lenders do their best to encourage people to take out mortgages from them.

The same goes for California home buyers. It’s best to seeking a loan officer in Red Bluff once December hits as that’s when the competition begins to stiffen and it’s where people begin looking for homes. This will prevent you from being overshadowed by home buyers.

Now, that isn’t to say that you should only take out a mortgage during these months. There will be other times in the year when the market becomes competitive and lenders open up good opportunities for loans as well. It’s still best to be on the lookout for deals during other times of the year as well.

As a general rule of thumb, you should begin looking for deals when the market is very active. Look for certain trends in the industry. If more and more people are buying homes for instance, check out your local lenders if they have begun offering good deals and discounts as well.

With that out of the way, there are other factors that will affect your mortgage. Again, timing is very important. Another factor to consider before taking out a home loan is your credit rating. If your credit rating is not good and there’s still room for improvement, you might want to hold back on loaning first.

You should try to improve your credit rating first. There are a lot of things you can do to improve your credit rating and a year can actually do a lot for yours so long as you know what you’re doing. With a better credit rating comes a ton of opportunities for loans – including mortgages.

One of the easiest ways to improve your credit is by paying your bills – including your current debts on time. Doing this can significantly change your credit score in no time. Once your credit score is at its best, that’s when you should begin taking out a home loan.

The reason for this is that lending companies will feel more comfortable offering you deals since they see that you’re a good payor. In some lending companies, you get access to exclusive deals depending on your credit score. This is a good idea to ensure that you’re getting the best price possible.

Last but not the least, avoid taking out a loan when the housing market is in a slump. Lending companies are going to try and make ends meet during these seasons which means they’ll be less aggressive when it comes to giving discounts. 

Last Tips

Don’t try to rush buying a home as there are plenty of opportunities to do so. A good tip is to monitor the market for a year. Get quotes from lending companies each month for a year and check which months offer the best rates. The following year, if the movement stays the same, then capitalize on the opportunity presented to you.

That being said, it’s a bad idea to jump on the first offer that is provided to you. Whether or not you have good credit, there’s always going to be mortgage offers provided to you. Be patient and try to wait for the perfect deals. Jumping on the first one is a bad idea as it can mean missing out on better opportunities in the future.

All it really takes to find good mortgage deals is patience and a lot of determination. In time, you’ll be able to buy your own home without having to pay for the price in full upfront. Mortgages are there to help those on a limited budget and hopefully, you find a good deal soon.


My wit is my power. Writing is my life. I'm from this often stereotyped place called Mississippi. I like green eggs with my ham and pancakes without bacon. I enjoy cups of green tea and James Patterson books. I'm ultimately here to share my gift. The rest is still unwritten.

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