Is Now a Good Time to Buy a House?

The sky is falling, the market is crashing, there are many different dears out there about todays economy. no matter how much the government tries o step in to help, there is no secret that the economy is in trouble. The housing market is one of the biggest concerns in todays society, right now housing prices are dropping day by day and many people are probably thinking it is a great time to buy cheap. But is it a good idea? If you have the money to buy a house, especially now seeing how cheap they are selling the lure is there, the thought of turning around to sell it for a big profit when and if the market goes back up, but it may or may not be worth it to you.

1. How long do you plant o stay in the house? If your plan is to buy the house, live there for a year or two and sell it then it probably is not a good idea, the market shows no signs of going up again in the near future, between taxes, property insurance, mortgage insurance, closing costs, you may end up losing a lot more than gaining if you were to sell in a just a few years.

2. Is all of your money tied to the house? If every penny you earn is going to pay for your mortgage and escrow then no do not buy a house. What if there is a job loss, emergency, if you have no savings or back up plan how can you keep up on payments? Do have any liquid assets, something that you can cash out immediately? Prices of everything is increasing, gas, food, clothes, can you afford your house and to still get by in every other area? If you know that you would be covered in case of an emergency and be able to easily or at least close to comfortably maintain your house payments, then yes, buy.

3. How is your credit? Obviously if your credit is bad you will have a harder time getting a loan, and if you do get one your interest rate will be much higher than someone with just plain old "average" credit. If your credit is poor, take the time to work on repairing it, in the long run you will save money and benefit by having a much lower interest rate. It is not worth it to say, "well I will buy this house at 8% APR and then just refinance once my credit clears up". You need to remember refinancing is not only tied to credit but also to home values, so even if you go from a 580 to an 800 credit score, if your house does not have the appraised value it needs, you will not be able to refinance. Right now most of the country is in an "upside down" market and the values are just not there.

4. Quality of life? Most of us say we own a home and it is an investment, but unless you are buying and selling real estate to rent out, it is not really an investment as much as it is YOUR home. You will spend every day there, raise children there, start a family, have parties and make memories. Do not buy just to buy, if you see a house dirt cheap, pay attention to the area, the schools, the kind of neighbors you will have. Most people buy a house to take a step up from renting, to improve their quality of life. You want to go somewhere that you can feel safe, where your children can go out and play and you are going to be truly happy. Make sure you are buying for the sake of finding a home where you could possibly spend the rest of your life and not for the sake of buying because it is cheap right now.

5. Cost of rent? If you calculate what you would pay for your mortgage and takes/insurance monthly and factor in added expenses for owning a home and it is close or same as what you are paying in rent right now, then yes buy, at least you have something that is your own.

In the long run, if you can comfortably afford to buy a home and are ready for all the things that come along with it, repairs, taxes, insurance, etc., then yes it is a very good time to buy a home. Drive down any block in any neighborhood and you are bound to see more than a couple house for sale, right now it is a buyers market and sellers, especially on blocks where there are 2 or 3 houses for sale are willing to compromise and you may find a great deals. Not only on existing homes but new construction to, many builders are offering incentives that someone may have paid thousands for a few years ago, granite counter tops, marble fixtures, upgraded kitchens, just to name a few. No one can say for sure if the market has hit rock bottom, but even if it has not, I think it is not going to go much further, so if you can do it, do it now! Just look at the whole pciture, just becaus eprices are low right now does not alway smean it is the best time for you to buy, everyone has a different life and different situation.