As a potential Buyer there is much to consider in the market today. Nearly every time you turnaround a news outlet is reporting a differing real estate market scenario.
Here we provide answers to the top Buyer’s Questions in the market today. As an educator and advisor, our goal is to arm you with more knowledge so that you can make more confident decisions.
Q: If it’s possible prices will continue to fall, why should I buy now?
A: While a seller’s concern is price, a buyer’s concern should be cost. When calculating monthly payment, consider the price of the home and your mortgage interest rate. Waiting for prices to bottom while rates increase can cost you more over the life of your mortgage.
Q: Does buying really make better sense than renting?
A: It’s a personal decision and best to weigh all the options. While finances are important, are there non-financial benefits you’ll gain e.g. more living space? control over space? safety? place to raise a family? Your answers will help you determine what’s best for you.
Q: When will I see appreciation if I buy now?
A: According to CNNMoney, Move.com rated San Diego the #1 top turnaround town for housing market recovery. On a national scale experts anticipate values to increase beginning the latter half of 2011, reaching a cumulative appreciation of 10% by 2015.
Q: Are my finances good enough to get a loan?
A: As of this writing interest rates are historically low. To get pre-approved and take advantage of these rates, a lender will want to know about your income, assets and credit, likely requesting: previous year tax return and W2s, recent paystub(s) and recent bank statements. See a previous blog post to learn how to prepare..and repair your finances.
Q: Are banks lending?
A: Yes, they are. The significant changes from the bubble’s easy-lending years are qualification and time frame. Lenders are ensuring all applicants meet their standard criteria (see Q#4) and that due diligence is conducted before approving.
Q: Is a 20% down payment required?
A: Working directly with your preferred lender will help you determine how best to structure your loan to produce a favorable monthly payment. Legislation, however, is currently being reviewed under the Dodd-Frank Wall Street Reform and Consumer Protection Act that could require a 20% or higher down payment for home purchases.