It is natural as a First-time buyer to be very nervous about entering the real estate market. This was true during sky-high interest rates in the 1980′s. It was true when the real estate market was booming in 2005 and it is still true today. First time home buyers in this market worry about the cost of buying, the process itself, and of course what it will mean for them to be a homeowner. Owning a home is typically the biggest financial responsibility a person will undertake. It starts with the cost of a downpayment, for first time home buyers this can be on average 3.5% and closing costs (which in many cases the seller will cover) and continues with a monthly mortgage payment and annual maintenance and repairs. Today’s market, however, brings new worries to the table. The economy is on the brink of a renewed recession. Fewer buyers can qualify for a home mortgage, especially since many lenders want at least 20 percent down on a conventional loan and 3.5% down on an FHA loan. Plus, unemployment rates have remained consistently above 9 percent in the Denver metro area. What do first-time buyers really need to know about today’s market? Here are some things you may want to consider. Interest rates are at historic lows, with 30-year fixed rates between 4 and 5 percent now. This is incredible time to buy a home. Imagine the difference between an interest rate of 4 percent and one at 13 percent. For a $100,000 with 20 percent down, you’ll find a payment near $568 a month. For the exact same home at 13 percent which was typical in the 1980′s you’ll see a monthly payment of over $1,000. Home prices fell after the bubble burst around 2005-2006, leaving affordability rates at generational highs. This means there are great deals to be found. In addition, there are a large number of foreclosure and short sale properties in the Denver area available, sometimes at even more savings. And you monthly payment on a mortgage can be less then what you are paying in rent in many cases. It’s not all silver linings, though. Home values are still falling. It is of paramount importance that if you’re in the market to buy, you must research your own local market trends. Are home values plummeting? Are they holding steady? Many times the housing market is directly linked to the health of the jobs market. There are reasons to buy other than just making a sound financial investment. If you plan on remaining in your home for many years to come, then now is a good time to buy regardless of pricing fluctuations. The social benefits still remain strong and your home will be an investment over the long-term. Be sure to think long and hard about the true cost of homeownership and if it’s right for you. This is not a time to get into a financial situation you can’t handle. Is your job steady? Do you have an emergency fund in addition to your downpayment amount? It is important to hire a knowledgeable real estate professional. This can be an excellent first step on your way to finding the right home and neighborhood for you. I can help answer all of your questions about the process. There’s no reason to go into this process blindly. Let me guide you. Buying a house is a big decision, but don’t let scary headlines deter you. There are great deals to be had in today’s Denver market. Denver, Colorado’s Residential Relocation Realtor. Denver’s Top Short Sale Realtor. For the most comprehensive Colorado Real Estate property map search please visit: www.5280exit.com. Thank you very much for reading my blog and I look forward to working with you. Tatyana Sturm, EXIT Realty DTC, Realtor, Denver, Colorado Proud Greenfield, Aurora, Colorado Resident and Realtor “Buy or Sell a home in Denver, Colorado” firstname.lastname@example.org ~ 720-350-5909 Thank you very much for reading my blog and I look forward to working with you. Tatyana Sturm, EXIT Realty DTC, Realtor, Denver, Colorado Denver, Colorado's leading short sale expert www.5280shortsales.com Proud Greenfield, Aurora, Colorado Resident and Realtor "Buy or Sell a home in Denver, Colorado" www.5280exit.com
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