Some people might see now as a bad time to buy a home; the market is unsteady, prices are fluctuating, and banks are not inclined to lend. Yet, for a first time home buyer, now is a perfect time to buy.
First off is price; there are homes on the market that – as little as a year ago – were going for two, three, and even more times their current asking price. So, there are incredible bargains to be found. Two key elements to consider though are location and condition. A dirt cheap home might be that price because it is in a terrible neighborhood. This is where checking with local realtors and doing some homework is important. And next, there’s the condition of the home. If the homeowner has been struggling financially for some time, they may not have been able to perform routine maintenance and upkeep. So, get the home inspected to insure plumbing, electrical, foundation, and so on are in good condition. If not, offer less.
While many banks are tightening up on credit, you can still get a loan – provided you follow certain steps. First, keep the same job, and keep working it the same way. This may sound confusing, but here’s how that works. If you’re working for an employer, maintain your work status with that employer. If you’re a full-time employee, don’t let them change you to a contract employee. Even though you’re doing the same work for the same boss, this is considered a change in employment, and most banks will shoot you down on a loan. So, as much as possible, keep your same type of job, at least until after your closing.
Right now, the interest rates are incredibly low; so – if you qualify for a mortgage – you can get a great loan. The key here will be your credit rating. So, before approaching a bank, get a copy of your credit report and see what your number is. If you have some old bills or too many credit cards – pay those bills and cancel some of those cards. These will boost your rating, and this can shave as much as a percentage point off of your interest rate.