I read in the New York Times last Saturday that first-time home buyers may be living in a Golden Age. Columnist, Rob Lieber, predicts is that what economists will say in 5 to 10 years time as they analyze the past through the rearview mirror of hindsight. Mr. Lieber writes, "Then everyone who sat on their down payment savings accounts for a few years too long will kick themselves for not taking advantage of what may turn out to be the buying opportunity of a lifetime for those who can qualify for a mortgage."
According to Mr. Lieber, first-time homebuyers have a lot of advantages right now. First, they don't "have to sell their old place before buying a new one." Second, housing prices have dropped and third, interest rates are low.
But before you take the plunge Mr. Lieber suggests you stick to the basics such as making certain that the mortgage payment, taxes and insurance will not exceed 28% of your pre-tax income. He warns that even if your lender were to pre-approve you for more that you hold yourself to the mark. You may find it necessary to get your credit rating score as high as possible. If you find your credit score less than 720 then you need to stop using your credit cards for several months and pay down the balance. Make certain you make every payment deadline as well. If your credit score is above 720 you can qualify for best mortgage rates. Still, to be safe, I would ask your mortgage lender what credit score they require before granting the best rates.
Finally, consider staying in your new home for a considerable length of time - say 10 years - if you wish to make money on the large investment of a home. Who can say how quickly the economy will recover? Buying a home is a long-term investment. If you're considering venturing out into the housing market, give me a call at 402-697-4251 or email me at Marie.Otis@cbshome.com. I know the Omaha Metro Real Estate Market so let me be your guide.
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