This ReMax TV Commercial called Kick is an excellent demonstration of what could happen to you if you think you should still wait to become a home owner. The commercial shows a person kicking themselves in the rear end as they are looking at a Remax Sold sign in front of a home that the person wanted to purchase. Hopefully this will not be you if you have been on the fence about whether and when you should buy a home.
Decide To Buy A Home Based On Two Questions
- What Are My Personal Preferences?
Do you want to be a homeowner or not? Are you ready for the responsibility that being a homeowner brings? These are questions that only you can answer for yourself. There are a lot of resources out there to help you with what you need to know about owning a home and being a home owner.
- Do I Qualify For A Mortgage?
The second part about you buying a home has to do with whether you qualify for a mortgage or not. You may be asking "Do I qualify for a mortgage and if not what do I need to do to qualify?" As for the answer to this question, GetPreQualified.com has a lot of information to help guide you through getting pre qualified to buy a home.
Are Mortgage Interest Rates Going To Go Lower?
Mortgage interest rates may go lower, but how much more lower do they need to go? As of May 2009 mortgage interest rates are in the low 5's, will a drop in another .25% make that much difference to you? Interest rates have been relatively steady since the end of 2008.
A safe interpretation of the trend is that they are about as low as they are going to go and at any minute they could go up. If they go up, well...we probably do not need to discuss what that means. Going up interest rates means higher payments and less home price that you qualify for.
Do you really want to gamble with interest rates any more than you have? Take a principle and interest payment on a $200,000 mortgage at 5% for 30 years. The monthly payment is $1,073/mo. If interest rates drop to 4.75% the monthly payment goes down to $1,043 or $30/mo.
Sure $30 is $30, but is it that much of a difference to you that you need to risk increasing interest rates? If it is, perhaps you are looking at the wrong thing for buying a home. Perhaps you need to be looking at a less expensive home, or looking at how to make more income.
Couple the risk of increasing interest rates the longer you wait with what home prices may do and the evidence for buying a home sooner than later get pretty compelling.
Are Home Prices Going To Lower?
"Maybe - Maybe not" is what any good real estate agent shouldl tell you right now. Perhaps in some of the harder hit areas around the US the home prices may go down a little more before they start to rebound like. Some of the places are in Arizona, California, Nevada, Florida, and Texas. But in other parts of the country homes prices are likely not going to go down too much more.
What is happening however is that there are more and more home buyers getting in the market which is starting to impact the number of folks bidding on homes and making purchases. With this happening in more and more regional housing markets it is likely that home values will certainly stabilize and eventually turn towards going up again. If you wait much longer you may wait yourself out of the home you really want or the price you really want to pay. You could even be risking all of this with increasing mortgage interest rates.
Your choice as to whether you want to wait any longer, but the Remax commercial is a wonderful expression of what is starting to happen in the market. If you are serious about buying a home, now may be the right time.
As far as 2009, and if you are a first time home buyer you may want to consider buying a little stronger so you can take advantage of the first time home buyer tax credit.
