5 Ways to Avoid the Pain of a Housing Market Crash

Whatever the current state of affairs for house sellers may appear to be, a look back in history warns us that a housing market crash often follows significant price rises.

Five Ways to Protect Against a Housing Market Crash

1. Build an Emergency Fund

To be prepared for emergencies, save enough money to cover three to six months of expenses. You may aim for a larger emergency fund. However, this depends on your comfort level.

2. Consider Refinancing

If you already own a property, consider whether now is the best time to sell. Consider refinancing your current mortgage and take advantage of the present low rates.

3. Do Not Spend More Than You Are Able to Afford

If you overpay on a property, you can almost be bankrupt when the market recovers. You are better off searching for less expensive properties if you’d have to watch every penny to make a mortgage payment.

4. Make the Maximum Down Payment That You Can Afford

The larger your down payment, the more equity you’ll have in your property. Equity is the difference between the mortgage balance and the value of your home.

5. Advice to Homeowners Keen to Sell Their Property

If you are planning to sell in the next several years, then now might be the right the time to do. Do your own research but housing prices are still strong and despite recent rises, interest rates are relatively low.

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