Foreclosures, bankruptcies, home evictions; it’s words like these that may make you question buying a home right now. With the home market going down the tubes, you may be wondering if this is the best time to snag a deal and find a home way below market value. This is a very good question and a lot of it comes down to you and your personal finances. Through this article I will try to give you some insight on what it may be like buying a home in the current market.

One of the main issues with buying a home right now is getting approved for a good mortgage. In the past the rules for being approved for a mortgage were much more relaxed, this is one of the main reasons most people are in foreclosure today. In the past mortgages where given out like lollipops after a doctor’s visit, but now there are much tighter restrictions. Lenders are pickier about people being approved; banks loose money when they have to foreclose on someone, so they want to avoid this pitfall as much as possible.

©ddpavumba - freedigitalphotos

©ddpavumba – freedigitalphotos

Now if you already qualify for a mortgage, have great credit and a solid income, you will be in a great position for purchasing a home. You will have a lot of advantages when you eventually find a good deal on a home. With the declining market, you can find homes that have been foreclosed on at a good deal, or even people trying to avoid foreclosure and selling their home way below market value. You can even save money buying a new home; make a lower offer than you think would be accepted you will be surprised on how many people say yes. Whichever route you end up going there are some definite things to keep in mind to protect you and your family’s future.

First when applying for a mortgage, don’t over do it. Most people go for a larger mortgage than they can handle. They justify it by saying, they will make more money in the future, or that they will skimp on other things in life…trips, home goods, cars…etc. Going for a larger mortgage and being house poor is not the best way to live though. Being able to have a mortgage you can afford and still put money into savings and doing things you like to do is a much better route. Because even though you think getting your dream house will satisfy your every desire for the rest of you life, this feeling will probably only last the first six months you live there.

When thinking about how much you can spend on a mortgage, take time to think about the future. Do you have kids, are you going to have kids, do you have student loans, do you have future kids college to pay for, when do you plan on retiring, do you plan on buying a new car, what utility and home bills will come with house, how much will you need for taxes each year? These are all questions you need answers with numbers to find out how much your mortgage should be.

Working with a real estate agent is a good idea when buying a home, but make sure you find one that fits your personality. You are going to be working with this person a lot and finding one you like is going make your home search much more pleasant. Not all real estate agents are the same, some will be calling you and emailing you everyday, others you won’t hear from for a month. Decide which method you prefer and when you meet with an agent, try and get a good idea on how they do business.

Also, don’t depend on your real estate agent to do everything for you; even the best agents can miss things. So do your own research as well, if you found a potential home, look into everything: neighborhood crime stats, school district, the whole area in general. Make sure you get out of car and walk the neighborhood. Talking to the neighbors is always a good idea and it can help you get to know the area.

Make sure to negotiate with the home seller, like I mentioned earlier, you will be surprised by what the person may accept, because right now homes are just sitting on the market. You might say well what if they reject the offer and I loose my dream home. This isn’t always the case, they may reject the offer, but in most cases they will make a counter offer. Yes, they may be insulted at first that you tried a low ball offer, but it’s likely the only offer they’ve received and they should eventually come to their senses and try to negotiate an acceptable offer.

To buy a foreclosure property or not is a great question and one that depends on different things. First, the condition of the home; what kind of shape is it in, did the people take care of it, or is going cost you more money than it is worth to make repairs to it. Make sure to hire a home inspector to come in and exam any property before you buy it. Another variable is the neighborhood, look around and see how many foreclosures are around the property you are buying. You may not want to purchase the home if the area is going downhill. The more foreclosures around your property the bigger decrease in your own home value.

So buying a home in an unstable market is definitely doable if the conditions are right for you. Do your homework before purchasing, look outside the box and ask yourself all these important questions before buying.

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