There are actually two things you should ask yourself if you are thinking about buying a home.
1. Is it the right time for me to purchase a home?
This should be the easier of the two answers for you. If you have good credit and 20% as a downpayment it is a fantastic time to buy. The prices of homes have dropped dramatically (more so in certain areas) from their peak and interest rates on home loans have been at historic lows. If you secured your home with a Fixed Rate loan of 15 or 30 years you were getting an incredible deal.
Home prices have been inching up since the Spring & fortunately mortgage rates have maintained themselves relatively low. By August the median price of homes have risen and we can only hope that the rates stay low & at the end of the day that is what really matters. The rates will never go to 0% and it is very probable that they will not dip below 4% on a 30 Year term. Interest rates are far more likely to rise and that means that the cost of ownership will rise as well.
2. Is buying a home a good investment for me at this time?
What are you really looking for in an investment? If you take out a 30 year loan on a median priced house with 20% down... Your homes value would have to increase 3% a year over the 30 years in order to recoup your costs (this does not include Annual Taxes & maintenance). A 3% increase is very likely to happen and we would all hope more of course. This is definitely better than the normal "Joe" does in the stock market.
Let us not forget that the value of happiness & peace of mind that you will have by being a homeowner. Many will say that the memories will far surpass any other investment & cost of ownership. Just remember that buying a fairly priced home today with todays rates may be the best deal you will ever get.
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