If you are thinking of buying a new home, perhaps your first home, 2008 is an uneasy time to purchase a property. It certainly makes sense to be a bit gun-shy about buying a home now with all the mortgage problems as of late, fluctuating interest rates, talk of continued problems with the economy and so on.
Some other factors that may be weighing on your mind about whether now is the time to buy your new home are:
- Are property values still going down?
- What do I have to do as a first time buyer?
- Can I get approved with not so perfect credit?
With these and other questions on your mind, it is no wonder why you might be hesitant to move forward on securing your piece of The American Dream. While I do appreciate your concern, I propose that now is an ideal time for you to perhaps go out and snatch your dream home – the market won’t stay this good forever!
Are Property Values Still Going Down?
While this question is certainly in the minds of many, is it really that important of a consideration? Well, that depends. A declining real estate market is only perhaps important if you are an investor looking for a short term investment. But, what if you are looking to buy a home to live in for let’s say at least 5 years. If this is you, then whether or not the market is declining is perhaps less of an issue and here’s why.
What Goes Down Must Go Up
I hate to be cliché, but it may be that you have heard the phrase: “What goes down must come up” or “What goes up must come down.” This is especially true with housing. Housing appreciates over the long haul. There might be market adjustments from time to time, but historically, prices rebound and then continue to increase over time. Given this, if you buy now, your home value might decrease slightly, but as the market rebounds – which it probably will – so will your home value.
I Will Wait To Be Able To Afford What I Want
If you are waiting for the market to continue to go down for affordability reasons, then perhaps you should wait. Or you should downsize the house you are looking to buy if you need to buy now. Buying a home that you can’t afford now is just plain silly. Wait until the prices adjust down enough for you to be able to qualify.
Waiting May Cause You To Miss The Boat – Umm The House
The danger in waiting on property values to go down more, especially given we have had a decent amount of time under these market conditions is that you may run the risk of having that home that you want be purchased right from under you; other people are starting to buy again. Also, if you wait too long, home prices may begin to actually rebound, or interest rates could shoot up. In either case, you could miss the opportunity to really get what you want.
One thing you should do is find out if an area is appreciating or declining in value. You can do this by speaking to a real estate agent. They will know what home values are doing with regard to locations that you ask about. There are actually some markets out there still appreciating despite what’s happening everywhere else. The only consideration here is whether the neighborhood has made any adjustments down already or are they heading to a downturn. Again, speak to a real estate agent to find out. If it is headed for a downturn you may consider either waiting or finding a new neighborhood to consider. A place to look for properties to buy or for a real estate agent to work with is PropertyNut.com.
First Time Home Buyer? or Not So Perfect Credit?
Yes and Yes. I’m going answer both of these questions together as my answer applies just about equally to each one. These programs still exist; you just need to know where to find them. They aren’t in the regular conventional conforming Fannie Mae Freddie Mac loan products anymore like they used to be. Where to look is at FHA Financing.
There are many different FHA programs available for first time homebuyers and/or for folks with less than perfect credit. FHA was designed by the U.S. Government to help folks from all walks of life who want to buy a home a way to do so. FHA has a commitment to U.S. citizens being homeowners. Furthermore, FHA understands that people from time to time have things happen to them that impact their buying power with savings and with their credit. So if your credit isn’t stellar caused by some extenuating circumstances then it might be worth while investigating an FHA loan.
Now this isn’t to say really bad credit (credit scores less than 500 for example) should be looking to qualify for an FHA loan. In the case of bad credit you should take steps to improve your credit. In brief, make sure to have your credit history show no late payments for the previous 12 months prior to when you want to get the FHA loan.
For more information on FHA loans go to GetPreQualified.com’s section on FHA Financing.
So is it the right time to buy as a first time buyer? Only you can tell for yourself. Hopefully what you have read here will help you work through what is holding you back if you are unsure because of market conditions, interest rates, and loan programs availability.
