Real estate analysts all say it is a home buyers market right now. But is that the right move for everyone?
We hear almost everyday that there are a number of reasons to consider buying a home right now.
"This is due to the decline in housing prices, the low interest rate environment and the eight thousand dollar tax credit,” said Wendy Pang, senior VP of Central Pacific Homeloans. “However, before you become a home buyer, it's a good idea to ask yourself a few questions to see if you're ready."
First and foremost, according to Pang, you should have a steady, reliable income and you should have had that for two years or more.
Next, a glimpse into the crystal ball.
"What are my future plans? It's good to realistically examine if you are going to be in the area within the next five years. If you think there's a chance that you may need to relocate for work, it may be a better option to rent rather than buy,” she said.
She says the five year outlook is just a ballpark number, but a fairly good timeline to keep in mind. Next, - the down payment and closing costs.
"Most mortgage programs require a down payment with the exception of the veterans administration or VA loan programs which is a zero down payment program for the military and also the FHA or Federal Housing Authority offers a loan program with as low as three and a half percent down,” she said.
Those are the exceptions.
Most mortgage programs will require a ten to twenty percent down payment.
With that in mind, you need to make a budget with your fixed costs and more.
"You should also know what your variable expenses are month to month. Those would include things like child care, entertainment costs, clothing and food. When you have all of that down, you can compare your income to your expenses and you can see you're actually spending your money versus how you're planning to spend it.”
