Buying a Home in Current Economy Could Be Smart
Mortgage rates are at historic lows. Housing prices are way down from a couple years ago. And sadly, foreclosures have put more homes on the market.
Now can be a good time to buy, but you must be prepared. We urge you to do your homework. For example, learn what lenders and sellers want to see in a potential buyer; we can tell you if you meet those expectations. Also, if a home is priced below the market, understand that it may need a lot of repair work to make it livable. Don’t forget to check the neighborhood; is it stable, or does it appear to be declining?
The points below are a good starting place, and our resources are at your service if you have questions or want more information.
Your financial outlook
Your initial cash outlay will include not only the down payment, but also closing costs, insurance, moving expenses and more. If you’re not sure you have enough, mortgage options are available with as little as five percent down. Consider your job stability; will you be able to make monthly payments for the foreseeable future? Also, be sure your credit history is as clean as possible, as mortgage lenders have tightened underwriting standards.
Consult with experts
Familiarize yourself with the terms and procedures of buying a home. Our website’s mortgage page is a good source for valuable information.
Stay within your means
If you have to struggle and sacrifice to make your mortgage payment, you could be in over your head. Know what you can comfortably afford.
Qualified buyers have leverage
Qualified buyers are few and far between in this market, so they have more negotiating power. Apply for pre-qualification so you can say, “I want to buy this home and I'm already pre-qualified by my credit union.” If the home has been on sale for a while, the seller probably knows all too well that the next potential buyer may not be qualified.
Foreclosures have put many homes on the market at substantial discounts. Some may need extensive repairs, so be sure you’re up to the task before you buy. There are realtor-sponsored websites where you can browse lists of foreclosed homes in your area with no obligation.
Be sure to do your research on buying a home in this economy, and when you’re ready to move, remember that USC Credit Union is still lending and still has the best rates and lowest fees around.
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