Buying a Home in Today's Market

By
Mortgage and Lending with NFM Lending , Chad McShane, NMLS #342881 NMLS 342881

Why Homeownership is Still a Smart Long Term Decision

You've heard news reports saying that the housing market is in turmoil, and that home prices are stalling, if not falling, in many areas.  And it's tougher to get home financing.  So does that mean the game is over---is it just too late to buiy a house?  Well, before you write another rent check or write off another opportunity to buy another property, consider a few things that you need to know about homeownership. 

  1. HOMEROWNERSHIP IS A SOLID LONG TERM INVESTMENT.  Home ownership has proven to be a critical contributor of financial well being for American families for decades.  Real estate did especially well btween 1998 and 2005 but I'm not thinking of just that period.  Housing has been consistently generating solid gains since at least the 1950's.  My point is simple - long term homeownership generates wealth, renting your home does not.
  2. THE IRS GIVES BIG ADVANTAGES TO HOMEOWNERS.  The federal government provides tax breaks to homeowners allowing deductions for mortgage interest paid, mortgage insurance, propertry taxes to exempting capital gains taxes on your primary residence.  In some cases you will find that your after tax mortgage payment is comparable to if not lower than your current rent payment!
  3. HISTORUICALLY HOME PRICES HAVE GONE UP!  Since 1975, through recessions and expansions, the average annual appreciation rate for a typical home is 5.9%.  If you plan to stay in your home for at least a few years, history is on your side.
  4. WHAT THE MARKET DOES NATIONALLY DOES NOT REFLECT LOCAL PROPERTY PRICES.  When considering future home price appreciation in your area ask yourself about prospects for local job growth.  Also, rely on your real estate agent who can tell you alot more than just listing prices.  Don't let media headlines scare you away!
  5. BUYING OPPORTUNITES HAVE IMPROVED.  Three major things happening right NOW!  Homes are the market have risen, sellers are willing to make concessions on price or closing costrs, and mortgage rates remain at historical lows.
  6. YOU DON'T HAVE TO WORRY ABOUT TIMING THE MARKET.  Ideally you would olike to snap up a home when it's at it's lowest point.  Remember it's not timing the market, it's time in the market. Get in the game today!
  7. SMART HOME FINANCING OPTIONS ARE STILL AVAILABLE.  There is a wide variety of mortgage products out there, filling various needs for borrowers in cretain situations.  Be sure to understand what you are getting.  Ask your lender questions like is the rate going to change?  What will my final loan balance be after closing?  Are you paying down the loan's outstanding priciple?  Do you have a pre payment penalty? Can I buy with no money down? Is FHA a better route than conventional?  There are many loan options to consider and it is important you work with a lender that you can trust.  I would love to help you make an informed decision about home buying!  I am dedicated to this industry and I enjoy helping people make informed decisions.

Comments (2)

Richard Ives
Chicago, IL

Great post Chad.

Have a great day!

Apr 23, 2008 09:50 AM
Bob Cosby
One Source Realty - Shaw AFB, SC

Chad,

  Problems in my market is that I'm next to Shaw AFB and many of the military people went 100% LTV with a VA funding fee tacked on to it, so now we cannot get them out from under the loan for the right price. I've turned down so many listings and feel sorry for them as I am retired AF and want to help them but cannot. I've suggested renting to most of them and they do not even want hear about it. Crazy days of Spring going on.........

Bob

Apr 23, 2008 03:20 PM