Buying a home

[JohnDB]

There seems to be two camps out there at this moment.

One group says that since houses are often selling for $0.60 on the dollar of what they used to sell for, mortgage interest rates are really low(4.5%), and there are tax credits ($8,000) for FHA) it is the best market to buy a home in a long time.

The other group says that since there are massive layoffs still coming and no one is going to have a job soon that getting into home debt is a risky proposition. (Job changes often mean moving to another state)That the whole pricing structure of homes is still shakey and that they may drop even more than what they have already.

What ya think?

[paul]

There seems to be two camps out there at this moment.

One group says that since houses are often selling for $0.60 on the dollar of what they used to sell for, mortgage interest rates are really low(4.5%), and there are tax credits ($8,000) for FHA) it is the best market to buy a home in a long time.

The other group says that since there are massive layoffs still coming and no one is going to have a job soon that getting into home debt is a risky proposition. (Job changes often mean moving to another state)That the whole pricing structure of homes is still shakey and that they may drop even more than what they have already.
What ya think?

Flip a coin. Personally my view would be that this is a great time to purchase a home. IF ? this stimilus works even to a small degree we will begin to see a increase in the value of homes ( referring to the stimilus to ease forclosures)A lot of people messed up by borrowing off the equity and got caught in the short term adjustable rates.. I have been watching my home value and in the last month it seems to have leveled off. John I bougth my house late 1997 for $139K it went to $455K at its peak then began to drop. Feb 08 at $403K and now Feb. 09 at $267K. And make sure you get a long term fixed rate, even if you have to pay and additional %.
So find a nice house, buy it, stay put and enjoy the roller coaster.

[TW]

There are a multitude of factors to take into account. First, is the stimulus package actually going to work? Then, do you have enough cash to make a substantial down payment? Do you have a job that will provide a reasonable level of security as far as employment is concerned? Are you looking for a "home," or are looking for a house to invest in that you plan on selling later for a profit? Are you looking at new construction, previously owned, bank repossession, or one that you can acquire for the back taxes? Everyone will have different answers to these and different priorities to their answers.

Personally I don't think that we have seen the market bottom out quite yet. The stimulus package is only a band-aid on a gaping economic wound, it will only forestall most of the foreclosures. The people that are being bailed out are not in any better position to pay their mortgages than they were before. the bail-out will only buy them a little more time. This problem has been building for 30+ years, I don't see it going away in a matter of a month or two.


TW

[Dr. Ron]

All advice good so far....

However, my two sources of financial advice are Dave Ramsey and Steve
Forbes.

Each of them say the whole thing rests upon your ability to stay employed in the area you are buying.

The "stimulus " won't work because the people being bailed out are mostly those who are laid off....and they will be back in foreclosure in 6 months or less. This is the dumbest move ever concieved by the government.

I don't know what you do, but that would determine whether you have some valid reason for buying now.

[Pastor Bill]

I don't know what you do, but that would determine whether you have some valid reason for buying now.

I think this is one of the most important factors.

Do NOT buy because of the market, it's your own personal finances, income, and the security you have in your employment and personal life.

IF you are in the place where it's time to buy, then buy, if not, don't be enticed by a good deal or best market. Then when you buy, buy what you can SAFELY afford, don't put yourself in a position where it will be a stretch to make payments, because costs are going up on many things, give yourself careful room in your budget and you'll be fine.

Of course all of this comes under the assumption that you are praying about this and letting God lead, that's the most important thing, He does know the future.

[dolfan]

If you can, buy now. Of course, "can" is relative, and your job security is a serious factor, as others have well said here. While values may not have bottomed out, inflation may push rates up soon enough. This perfect storm of low prices and low rates is a dream for first time buyers with sufficient credit and income. I know there are other factors to weigh, but if you have no reason to suspect that your particular job or employer is in jeopardy, then buy. As always, use good common sense --- buy within your budget, put down as much as you can. I wouldn't buy if I thought there was a reasonable likelihood I'd move within 5-7 years, though. You probably won't have enough equity in it to justify the costs of selling vs. the cost of renting over the same period. Just my .02.