| Home Buying |
| By Credit Federal |
Published
10/15/2007
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Home Loan
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Home Buying Beats Selling Market
Although housing prices have lowered and could go even lower, don't let that discourage you from buying. In fact, home buying right now is more advantageous than selling.
Calculate new purchase mortgage loan payments and interest or mortgage refinancing payments and interest.
Just stick to the basics: Do your shopping homework, draw up and stick to a budget you can afford, and shop carefully.
In regards to flipping or land speculation; however, should the market drop even lower you could end up owing more than you can resell the home for.
In regards to buying a new home to live in, although there are plenty of indicators that the housing market could worsen don't let that stop you from getting needed housing. If it’s time for you and your family to buy a home and you have a down payment so you can stop paying rent, this can be a great time to buy a home. In many markets, there are a lot more homes for sale than there are buyers. That means you should be able to negotiate a better purchase price than if there were multiple buyers to compete against.
To reduce your risks as a borrower, deal with a reputable lender, read all documents carefully, and ask questions until you’re satisfied and fully understand. If you think the lender or mortgage broker isn’t giving complete answers or won't help you fully understand, get another one. Good lenders are equally eager for good credit people. If you don’t feel you’re not able to sort out the documents to your satisfaction, consider getting a lawyer. A couple hundred dollars in legal fees could save you thousands in interest payments later by rejecting a high interest loan.
The hardest part is negotiating a purchase price. Some sellers refuse to accept the fact that their homes; due to the market drop, are no longer worth as much. After you’ve toured a half dozen houses or so in your price range, ask to see examples of recent actual; not 'asking', sale prices of comparable houses in that area. The only way to truly determine what the market is paying is by comparing actual sale prices. And the only way to determine the true price of a specific home is to make a bid. If the seller says no, move on to the next house on your list.
A big risk many home buyers face today is paying too much. Keep in mind that the national statistics about home sales, median prices, and foreclosures are averages. Areas where the boom in housing sales and prices was the strongest are now seeing the biggest drops. In other areas, where price gains were not as rapid, the market has remained relatively stable. So your risk of further price declines in these areas is more limited.
Figure out how much you can afford, and don’t get talked into a bigger house by real estate agents, mortgage brokers or builders who say you can afford a bigger mortgage. No one; but you, knows how much you can comfortably afford. And don’t forget to budget for rennovations, remodeling and/or repairs.
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