Sure, the economy is down, but the resulting real estate deals out there can be very tempting. With plenty of homeowners desperate to sell their houses and get out from under mortgages they can no longer afford, there are deals available now the likes of which haven’t been seen in decades. If you’re in a position to buy, now is definitely a good time. But how can you be sure your new home purchase is a good idea, or if it will plunge you further into the mires of the recession that have plagued so many already?
Simply pay attention to the following three pointers, and you’ll be in a perfect position to buy a house in a down economy and thrive with it.
1. Take a good look at your finances and make sure you can afford the home you’re considering. This means you need to be either employed or have a stable source of income. The money you make needs to be enough to cover the monthly mortgage payments of the home you’re considering. Today’s stricter lenders will want to know the answers to these questions. Typically, your monthly mortgage payment must not be more than 30% of your monthly income. And remember, the mortgage payment will include taxes and insurance, as well.
2. Decide how long you plan to be in the area. Single people who move around a lot, or people with jobs that require frequent moves may well want to wait to buy a home right now. In the past, you could buy a home and re-sell it again a year or two later for a significant profit. However, trying to do that now would most certainly result in you taking a significant loss. The best rule of thumb right now is to not buy a house unless you plan to stay in the area for at least 3 to 5 years to give the economy time to recover.
3. Ask yourself how well you can really manage your personal finances. If you’re consistently late on monthly payments or if you have trouble making ends meet throughout the month, buying a house now isn’t going to be a good idea for you. You don’t want to get caught up in a cycle of late payments that could totally wreck your monthly budget. Even worse, you don’t want to end up losing your new house to foreclosure like so many others. Only take the plunge and buy a house at this time if you’re very stable with your finances. Follow these three tips, and you just may be ready to buy the house of your dreams.
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I tell my clients it's lways a good time to buy real estate.