I am 21 years old and i am trying to buy my first home. I keep hearing about the housing market in the news but i don't understand much of the terminology. Is it a good time or a bad time to take out a mortgage?
2007-08-30 08:26:02 · 8 answers · asked by stretch 2 in Business & Finance ➔ Renting & Real Estate
The reasons the housing market is in the news so often:
Subprime (credit challenged) lenders are going out of business because they gave bad loans to people that couldn't afford those loans. Foreclosures are up for this reason. Lenders still in business are tightening restrictions, and fewer people can qualify for a mortgage now. You have to have decent credit to qualify for a loan.
Prices are stabilizing and coming down in most markets. Compared to the high year over year gains in recent history, this is news.
It is a great time to buy because inventory is up, prices are good, and interest rates are favorable.
If you are in a financial position to buy, don't let all the media hype effect you.
2007-08-30 08:42:46 · answer #1 · answered by godged 7 · 0⤊ 0⤋
No and why? In October a few million homes with ARM's are coming into interest rate rises, and even more in the months following. Credit is tightened making less buyers available which will make the trend of housing prices continue to drop, and they will. The market is flooded and will get worse, if the Fed drops the interest rate, it will not help much because of the tightening of credit, and with inflation rearing its ugly head. The housing market has been overinflated for some time now and a correction is just beginning to take place. Said this months ago, no one believed yet it is happening to not just the subprime market but to the Alt-A, the prime and the Jumbo. Housing has been appreciating at double digit, energy has doubled yet income has risen at 0.7% making everything unaffordable. Yes we have a record amount of houses on the market, yes it is a buyers market, but that market is only going to get better for those that can afford and meet the new criteria for loans. Those in real estate will say buy now, because their income depends on a sale, I say wait and you will get a better deal. Read the business news and keep up with what is going on
2007-08-30 18:25:00 · answer #2 · answered by Pengy 7 · 0⤊ 0⤋
It's never a bad time to buy a house, unless of course you're planning on holding it for a year and selling it for a profit.
If you look at real estate trends over the last 20-years you can easily find upturns and nosedives in values, but if you look at the whole picture you can see that real estate over the long-haul is ALWAYS a good investment.
Another good reason to by now: Mortgage rates are still quite attractive for good-credit borrowers. What will rates be like this time next year? If I knew I would be a wealthy man. I surely wouldn't be doing loans for a living.
Finally, ask yourself this question: "Do I see myself being able to live here comfortably for the next five years?" If the answer is yes, BUY!
Best of Luck.
2007-08-30 15:49:13 · answer #3 · answered by loancareer 3 · 0⤊ 0⤋
Anytime is the best time to buy a home as long as you have 20% down payment, 6 months savings left after you give your down payment, (this is just in case you lose your job after signing the loan). Let's say your monthly will be 2,225.00 a month 6x of your monthly should be your reserce/savings left.
Get a conventional loan not arm loan. There's so much to ask the Bank or the Loan Officer - just ask and ask questions until it is clear to you. All points and fees that you are going to pay should be discussed and initialed by the loan officer and by you stating that you both understand what those are for. If you don't understand, don't sign.
2007-08-30 15:33:14 · answer #4 · answered by runner 2 · 0⤊ 0⤋
Stretch, if you are interested in buying a home, now is a very good time, due to decreases in prices and the rates haven't been lower in 18 years! So talk with several local lenders to see what their programs are and how they might suit your financial picture. Next make a list of what you just "have to have" in a home and a list of "would like to have" in a home.
Next visit open houses and talk with the agents. When you find one you feel comfortable with and they seem knowledgeable about the area you want to live in, ask them to help you find a home.! That simple, Oh I almost forgot, give them the list.! Happy Hunting!
2007-08-30 15:41:47 · answer #5 · answered by Alterfemego 7 · 0⤊ 0⤋
It's as safe as you are. If you go with a reputable bank and have a steady income, you'll be fine. What you keep reading about are people who took out subprime loans with rising interest rates who were told they could refinance before the rates got too high, but then the bubble burst and banks started turning down refinance requests. Just do it smart and you'll be fine.
2007-08-30 15:30:07 · answer #6 · answered by ♫ Sweet Honesty ♫ 5 · 1⤊ 0⤋
You may have trouble, if you have shaky credit. Some people are waiting because they don't think the market has bottomed-out yet. I say, if you got good credit and you find a good deal on a place that you love, buy it!
2007-08-30 15:30:46 · answer #7 · answered by ? 4 · 0⤊ 0⤋
If you plan on staying a while and you aren't in a declining market.... It could be a great time to buy. You should speak to a local realtor who specializes in your area.
2007-08-30 16:30:37 · answer #8 · answered by DallasLoanGuy 2 · 0⤊ 0⤋