Should You Buy a House in This Market
June 2nd 2008 15:38
The market is flooded with houses for sale due to foreclosures and people that can no longer afford their housing payment. Many of those people in dire straits got that way because of shoddy loan practices that helped them get an adjustable rate mortgage, interest-only, or other poor mortgage choice. That was great for a few years, but one the interest rates began to rise and the principal was due on that loan, most people found themselves in deep water. I mean up to their eyeballs.
So now the banks are scared – and justifiably so. They can’t make money, if a borrower doesn’t pay on the loan. A few years ago, many banks were fighting to get those less desirable borrowers. Now, no one will touch them.
Back to my main point, if you can qualify for a good rate on a loan, then I say buy. Check
your credit rating before you apply – keep credit card balances low, pay your bills on time, get major discrepancies cleared on your credit report, etc. Also, make sure you really can afford the payment. You don’t want to end up like those people that are currently looking at losing their homes. The great news is that when the housing market picks up in a year or two, you will find yourself with a house that you got at a great price – a deal, in fact. Hopefully, (depending on your market) you will also find that the house is appreciating in value. That’s good for you.
Remember, if you can afford it, it’s always better to buy in a buyer’s market. This is when you can get concessions from a seller that they can balk at during a seller’s market.
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