WHY YOU SHOULD BUY ANEW HOME NOWYou’re renting a home and beginning to wonder if you should maybe buy a home, consider what author, David Bach, tells us, "Most average homeowner’s are worth up to 35 times more than the average renter."
His advice is for renters to take action immediately and start saving part of their paycheck every month to help accumulate a down payment. He also encourages renters to borrow 10-20 percent less than what the bank is willing to lend; that way you’re only buying as much home as you can afford.
The longer you rent, the longer it may take you to eventually get into homeownership. If the market conditions have scared you, perhaps you're not looking at the other side of the coin. Owning a home becomes part of your investment portfolio, provides tax benefits, allows you to build equity (it still exists), and, if you buy now, you may get an excellent deal.
According to Market Watch , buying a home now can provide some real negotiating power to request improvements, price reductions, help with closing costs, and more. People can get almost everything they need and most of what they want today.
While poor market conditions have created a tough situation for homeowners across the country , the downturn has made the buying market ripe for buyers.. The affordability of homes is better than ever. The National Association of Realtors' housing affordability index concluded that homes in December of 2008 were more affordable than at any other point since 1970 (the start of the index). And with numerous foreclosures on the market and prices dropping in many areas, now is a good time to buy. But in order to make your purchase profitable, here are some things you should consider.
How long will you be in the home? Some experts advise that if you are planning to move within a year, buying may not be the best option because of the expenses associated with moving. However, if you're searching for a place to live for, at least, five years, buying now could be a good choice for you.
How much you can afford. Don't let tighter lending regulations scare you off from making a purchase. Instead, understand what you truly can afford. Don't get caught up in buying too much home. In fact, these days, the trend is moving toward smaller homes.
Mortgage rates have dropped to historical lows. How much home you can afford is affected by mortgage interest rates that, right now, are very attractive. Good credit, documenting your income, and a substantial down payment will make you a better candidate for better rates.
Freedom to choose. Now, unlike several years ago, the market has a large inventory in many areas. The market time to sell a home has increased which creates a large inventory of homes, everything including new, existing, and foreclosures properties. Buyers can search he market and have the freedom to select the home they really want. If you're interest is in a new home, know that many developers are getting more competitive with their pricing because they also have taken a hit by the ailing economy, and some offer special rates the first year or are offering closing cost assistance.
Quality of life. Buying a home can create a higher quality of life, giving you pride of homeownership, and something to enjoy over the years.
Tax credit benefit. The American Recovery and Reinvestment Act of 2009 provides for a $8,000 tax credit that would be available to first-time home buyers for the purchase of a principal residence on or after January 1, 2009 and before December 1, 2009. The credit does not require repayment. Most of the mechanics of the credit will be the same as under the 2008 rules: the credit will be claimed on a tax return to reduce the purchaser's income tax liability. If any credit amount remains unused, then the unused amount will be refunded as a check to the purchaser.
Wondering What Your Home Is Worth? Let Us Show You
