gold dollarIs It A Good Time To Buy A House?

For the 1st time home buyer, an economic downturn is a good time to buy a house. You may not have been able to afford to do so if the market was different. In times of economic recession, the real estate market usually corrects itself, providing home buyers with exceptional opportunities that otherwise would not be available.

This could also be a good time for renters to enter the real estate market. Renters who have a stable income, a good credit score or fico score and very little debt, should consider purchasing a home. There is a huge supply of homes on the market, many from foreclosures and house values have generally bottomed out.

You may be thinking the advice to buy real estate is flawed. Before you dismiss this prospect and move on, consider the fact that the mortgage crisis of 2008 - 2009 was fueled by faulty and predatory lending practices. By becoming an educated consumer, you can avoid the pitfalls and take advantage of the low house values. The key here is to become an educated consumer.

The mortgage lenders are returning to more responsible lending, so the 100% mortgage is essentially gone. Most mortgage lenders now require you to have a 20% down payment with rare and exceptional circumstances allowing for less than an 80% loan to value (LTV). To qualify for a mortgage with as little as 3% down payment, you may have to purchase private mortgage insurance. As well, the 3% downpayment mortgage is still available through VA Loans and FHA - Federal Housing Administration Loans program.

New Home Investment

If you presently rent, you may be able to find a good deal you can afford with a small down payment. Consider purchasing a smaller home now in the current market. If you are willing to hold onto it until the market starts to climb, you will have built up equity in your home. Eventually, you can sell and move up into a larger house.

Real estate values are dependent upon your local market. If your local real estate market has been hit harder than others, then it may take longer to rebound. The reality is that you need a place to live, so if the cost to buy a house is comparable to renting, home ownership is a route to consider.

Be cautious about buying a house beyond your means. It is vital to consider all the costs of home ownership including mortgage payments, upkeep, taxes and home insurance, before you buy. (Click here to get a free home insurance quote.

Use the Renter Mortgage Affordability Calculator to determine the options available to you.

Understand the home mortgage application process.

Once you have calculated the mortgage amount you would feel comfortable handling, talk to lenders and get pre-approved for a mortgage before you start shopping to buy a house.


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Low interest rates and the high volume of homes available, makes the current market a great time to buy a house.

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