Christmas is behind us, and New Year’s Day is right around the corner.
If you are thinking that 2009 might be the year to buy a home, this is the time to start the planning process. Unlike years past, buying a house in the current climate may take a little more work.
To start with, lenders are looking for actual down payments with many loans. That isn’t to say that 100% financing is out of the question, but as the down payment goes up, options increase and interest rates improve. Having 3% makes the process a world easier. Having 10% or 20% makes the financing process even easier.
Of course, down payments aren’t the only financial consideration. One also needs to consider financial reserves (the savings account) and credit-worthiness.
This is a good time to look at your credit scores and make sure everything is real… it isn’t exactly rare that the credit bureaus make a mistake. Make sure that they have the correct accounts and get them fixed early. Lenders are a little tighter now that a couple of years ago. Also, if there are problems, it is easier to raise the score by correcting them when there isn’t a time constraint.
Financial reserves are actually something that can be more easily addressed at the moment. The federal government is offering a $7500 first time home buyer’s tax credit. There are some things to keep in mind with that tax credit. There are also some state and local programs that one might qualify for… although they are often tougher to find, and run out of funds from time to time.
Finally, after visiting with a good mortgage broker to find out what you can REALLY afford, start the search. Figure out what area or areas you might be interested in, and start to watch the prices. Some areas are actually tough to buy right now because demand is high. Other areas are seeing prices still dropping. The bottom line is that you want to know if you are looking at a good deal. The best deals pop back off of the market in days! I am seeing some great opportunities out there, but they are literally sold in the first couple of days on the market. The properties that are hanging out for a long time are often not priced attractively… although there are some gems hiding in that group too. But the point is that if you want a good deal, you have to recognize it and be ready to make a move.
As we get closer to spring, sellers get less motivated because they expect more buyers in the market.
Give me a call… let’s get started. I offer a free, no obligation notification service. I will set up a website that will notify you of the newest properties that meet your criteria.