First time home buyer questions............?

Question

I am thinking about purchasing a home over the next year, but I've heard that prices may keep falling even further and I don't want to risk being upside down in a loan.

Do you think it is an ok to buy yet?

10 years ago a $115,000 could buy a pretty good house. Now, it can buy you a crackhouse. I think prices need to come down a little bit more still.

Answer 1

Only YOU know if it's the right time for you to buy, and whether market has bottomed out is not the only consideration.

WAIT until you are ready but prepare.

BUILD your credit, paying every bill in full and on time.  Pay down your credit card balances, paying them in full every month or 3 times the minimum.  Stop using credit cards unless you can pay off amount every month.

SAVE for your down payment.  Your loan won't be upside down if you have a decent down payment.  Minimum is 3% for FHA, but more down payment is better.  Pay 20% down and you don't have to have PMI.  

Getting yourself into an upside down loan happens when people put little or no money down (0-3%) as down payment, or take out HELOC for 100% or more of home value and housing market declines.

So don't take on more debt than you can easily manage, make biggest down payment possible, and you will qualify for loans with better rates, which save you tremendously over the life of the loan.  ALSO making extra principal payments in first 5-10 years of loan can save you tons of money over life of loan (and shorten it).

Answer 2

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Answer 3

No one knows for sure.  The risk in waiting is that, while prices may decline further, interest rates are expected to rise.

Answer 4

It all depends on where you live, where I live $115,000 could buy you a really nice house. My neighborhood the house prices average about $80,000 (I have a 1166sf, 4 bedroom, 1 bathroom house with a new roof, new siding, new windows and recently remodeled)

Right now is a great time to buy

Answer 5

They will continue to drop for another year in my opinion- however, rates are on the rise.  Me, being in the mortgage business for so long, would advise those who are in your situation to buy now if you plan to stay in the house.  With inflation, comes higher mortgage rates- they have increased by over 1.5% just since January.

Good luck!