Should You Buy Now or Wait? 7 Home Buying Points to Consider

Should you buy your first home now or wait? The decision's best made by exploring your personal answers to the following 7 financial and emotional questions:
*Are you pre-approved for a mortgage you can live with? Even though loan requirements are tougher than they were a couple of years ago, there is money available for people with good credit and not too much debt. If you don't know, ask your Realtor for a qualified mortgage lender, so you can determine whether or not you can afford a mortgage. Real estate loan rates vary, so you want a fixed mortgage you can live with for the long term. A good mortgage lender will go over all the costs of owning a home with you (mortgage, taxes, insurance, mortgage insurance, and possible HOA costs). Did you realize that 30% of the homes in the US are paid off and have no mortgage? Further, did you know that 96.7% of the home mortgages in the US are NOT in foreclosure? The current instability discussed in our news is about less than 5% of US homeowners.
*Do you have your down payment money saved? You will need about 3.5% of the purchase price for the lowest down payment loan out there, an FHA loan. That's $5250 for a $150,000 home. If you can put 20% down, you'll avoid mortgage insurance and save yourself that monthly expense. That's $30,000 on a $150,000 home.
*Are you ready to start building your own wealth rather than your landlord's? Over time real estate is less volatile than stocks. Using US Census data from 2005, a home worth $18,000 in 1963 was worth $226,933 in 2005 and if the homeowner didn't keep refinancing it past the normal 30 year mortgage term, it had been paid off for 8 years! Real estate has a better return than savings accounts, as you know. The Federal Reserve Board estimates that homeowners' net worth has ranged between 31 and 46 times more than that of renters in the years 1998 to 2007! The combination of increased home value over time and paying off your loan builds your wealth in the long run.
*Do you want a place to call your own? Do you want to choose your own colors and finishes? Have pets? Take pride in your home? Have a yard? Work on your projects? Have your own space?
*Do you want the $8000 tax credit? The US government is giving up to $8000 to first time homebuyers who close their transaction before December 1, 2009. Since the money can be claimed against your 2008 taxes this year as soon as you've closed, you can have that money this year! There are income limits, so check out the details.
*Do you want to pay more for a mortgage when the rates go up further? For the past few years mortagage interest rates have been kept artifically low. Just last week rates burbled up about 0.25% of a point. If bond prices continue to fall, the interest rates will rise. Right now interest rates are hovering near the 40-year lows.
*Do you want a bargain? Prices have softened all over. Homes are more affordable than at any time since NAR started tracking this number! While the supply has decreased a bit this quarter, there are still more homes to choose from than there are buyers in many segments of the market. Ask your Realtor for specific details in the neighborhoods where you want to live. Find out what is available in your price range.

So what are your answers to the 7 questions above? Is now your time to buy? Let me know what questions you have and how I can help you with this important decision.