I had written a blog post a few weeks ago, Conventional Pricing Adjustments coming in April, in which I talked about how FHA had raised it's monthly mortgage insurance premiums back in October and how Fannie Mae will be adding onto their pricing adjustments in April of 2011. A realtor had stated this - "We saw the writing on the wall a while ago that this was bound to happen. If any time for a buyer to get off the fence and purchase would be now."
I have been reading these kinds of statements for the last 12 to 18 months. When we saw the home buyers tax credit, when values were dropping, and when interest rates dropped. But wait, are these the reasons why one should buy a home now? Or when we see changes in loan programs for the worst, one should blurt out, "now is the time to buy, before it gets worse." Sorry, but there is a lot missing to such statements. To me, there is a lot of false sense of education, because one should not buy just because of these reasons. Keys to home ownership should be thought out and not just because someone says it's the right time to buy now.
It's almost like the advertising that tells you to buy a car, tv, or furniture with no money down and interest free for the first 18 months. I wonder how many of those that buy very quickly when seeing such an add, plan out their future payments. Or does one just say, "awe, when that time comes, I'll deal with it then." Raise your hands... I am sure some of you have said this one time or another.
Seriously though, this is not to throw anyone under the bus or to mock them for such thoughts. But when buying a home, it will usually be one of the biggest investments in your life time. There should be careful planning. What things should be thought about when buying a home?
- How much of a payment can I afford? - One really needs to evaluate this; going over their budget to include their finances, their short and long terms goals, and making sure that they will have some cash assets after buying their new home.
The end result is that one should not be tickled pink from such incentives, especially if they weren't truly prepared to buy now. Or to read comments from people telling you that you should by now. Making you feel like an idiot if you don't take advantage of such deals and or incentives now. I still get some home buyers that call me up last minute when their credit is very less than perfect and or that they have no money to their name. It should take some careful planning. Many say talk to a realtor first, but sorry, I will disagree. Speaking to a loan officer that actually understands finances, deals with money every day, and works with different mortgage programs should be your first stop. The loan officer will usually be the one that understands credit and credit repair, and be able to help you with this and other questions. My main point though.... Be careful when buying your new home and have a plan, not a buying itch because it sounds good.
- In my opinion, it's always a great time to buy a new home, when having a plan and when you have been properly educated on the home buying process, even if you have bought before.