by Frederic A Din
Over the past several months a question has popped up frequently and it's obviously on the minds of many, that question being, "Is this a good time to buy or should I wait for house prices to fall more?"
In the March 2008 issue of my monthly mailed newsletter, Frederic's Home News, the article entitled "Shopping for a Home?" asks some probing questions of those desiring home ownership.
The largest financial decision of your life needs careful consideration and preparedness, however I have found that many during the boom-cycle of the 2005-2006 did little more than want to sign a loan application and hope for the best. By the best I mean the type of financing received. There was a sort of "herd" mentality that people bought into and they thought, "if I don't act now, I won't be able to buy a home because they keeping going up in price...". This lack of education together with the bad advice by inexperienced and greedy parties has led many homeowners to foreclosure. Where is the herd now?
Before I ask you to reply with your answer to the question, "how much more do house prices have to fall before you buy", I need to share FIVE important steps you should consider before you leap to buy:
- Talk to a mortgage planner and NARLO member. Frederic A Din is residential mortgage specialist and a member of NARLO, the National Association of Responsible Loan Officers, learn more by clicking here or by going here. Deal with those who know the industry and care about its goals.
- Get your credit in order before you start home shopping. Today's mortgage programs are stricter and better credit will help you no matter what type of loan you get. You can get credit report repair and restoration details by clicking here.
- Establish a spending plan and monthly budget. Part of the process in working with a mortgage planner is they will review your outstanding obligations and make recommendations to assist you.
- Save for emergencies by paying yourself first. One of the hardest people to pay on a month-to-month basis is ourselves, however if we make it a priority to put away $25.00 or more per month, you'll be amazed how it easy it becomes. Having a spending plan in place helps this process.
- Make sure you monthly house payment meets your goals. What? Did I lose you? Often times, first time home buyers will have a house payment that is much larger than their current rent, however if the other steps are taken care of first this last step comes naturally. One of the best uses of your money over time is paying a mortgage you can afford while taking the advantages that our government provides to homeowners.
So, how much more do home prices have to drop before you buy? 10%, 15%, 20%, 25%? More?
Post your comments and tell me about it...
Thank you, Frederic A Din www.homeloans.cc 760-344-5363
Here are some recent (within 30 days) home prices and sales data from the market in Imperial County, CA.
(net price is the sales price less any sales concessions, such as closing cost assistance, if known, data is deemed reliable but cannot be guaranteed.)
$248,000 net price, Wildflower North, Imperial, 4br/2ba 1,630 sf, cul-de-sac, pool/spa, patio
$185,000 net price, Sunset Ranch North, Imperial, 4bd/2ba, 1,854 sf, corner lot, patio
$212,000 net price, Heberwood, Heber, 4br/2ba, 2,297 sf, two story, new home
$152,000 net price, Sunset Calipatria, Calipatria, 4ba/2.5ba, 1,643 sq, two story
$219,000 net price, Las Brisas, Calexico, 4br/3ba, 1,694 sf, two story home
Depending on where you want to live, you can pick up a 4 bedroom home with at least two baths and over 1,600 square feet between $160,000 and $250,000 with ages ranging from 1 to 16 years old.
These homes were on the market an average of 43 days, which means these homes are coming on the market priced to sell and are going pending (sales contact) much quicker than before. More than likely these homes were not "short sales" since those they often require a lengthier approval processes from the current lender's loss mitigation department and those involved.
Sales prices have dropped on average between 10% to 18% in most areas of Imperial County since the peak prices of late 2005 and the first quarter of 2006. Must of the later part of 2006 through the fal of 2007 saw the market trying to gain a level, however during the later part of 2007 and through mid-March 2008 I have seen sales prices begin to level and sales times move quicker as the market is reacting to favorable interest rates and sales prices. The herd is moving again which is good news for the economy.
Remember, you can only see a "bottom" long after it's happened...therefore if you have followed the FIVE steps outline above and are READY to buy, make sure you contact me to help you with your financing by contacting me by clicking here or by commenting below.
Chances are you'll be in your home for more than just a few years, which makes any up and down price swings to the housing marketing unimportant as your goal is home ownership not home speculation.
Please comment on this article and let me know how much further to home prices have to fall before you considering buying? Rate are low and so are prices, Deal or No Deal?
* Note: Example rate as of March 17, 2008 and are subject to change daily.
You can sign up FREE for our RATE WATCH Service by clicking this link
FIXED RATE: 30 Year loan: 5.50% 5.694% APR, loan amount of $235,000, no prepayment penalty