Should you buy a home now?
First time homebuyers...you might think that spring or summer is the best time to buy a home...well, right now, it probably a great time to buy a home, even for first time home buyers. Let's take a look at just a few factors that are all contributing to making this an optimum time to purchase a new home.
1) Availability of 100% financing
100% percent financing still exists. Yes, it is leveraging a financial transaction, but not everyone has 20% of a down payment, plus closing costs to put into their first home purchase. The 100% programs are either a 100% one mortgage with mortgage insurance or an 80/20. The 80/20 allows you to avoid the expense of mortgage insurance and generally keeps your payment lower over the life of the loan by utilizing two loans. Your credit does not have to be excellent to obtain a 100% one loan, although, for the 80/20 scenario, your credit does have to be excellent.
2) Interest rates
Interest rates continue to remain favorable. For example, if you were to purchase at $100,000 home, as of November 21, 2007, the interest rate remains quite favorable at approximately 6.125% for a 30 year fixed mortgage.
If your credit is excellent, second mortgage rates remain favorable as well. Generally, a middle credit score of 680 or higher is required to obtain a second fixed mortgage at the most favorable rate.
3) Housing inventories
Housing inventories remain high. A recent article in Business Week, America's Big, Fat Housing Inventory illustrates the supply of homes for sale. Demand is low, so as a buyer, you might have the upper hand in negotiating a price for your potential property. The housing market continues to remain flat. While further declines in prices are possible, with the housing market as it is, this might be a short term issue, and inventories and availability can rebound quickly.
So, if you don't believe now is a good time to buy a home, well, it certainly is. Of course, any perspective homebuyer should be continuing to saving money, and continue to monitor their credit scores, and consult with a qualified mortgage professional to obtain a professional analysis.
Sincerely
Michael J. Sally
http://www.mortgagesbymike.com
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