Wanting to lie in wait for near give-away home prices along with a fear of overpaying for property is in the minds of more than a few prospective homebuyers.
But just like trying to time the bottom of the mortgage market is a lose-lose deal, so is the timing of home prices.
If you are concerned about paying too much, consider the following:
- Waiting for the “perfect” time can be more expensive. There are a lot of buyers who would have more equity today, despite falling prices, if they had bought when they were first considering it, instead of continuing to pay rent.
- The mortgage business and home financing is fickle right now. People who were more than qualified last summer can’t find financing this summer because the credit market has tightened or their personal financial situation now makes them a lesser qualified borrower. In many instances, they no longer qualify at all.
- Financing programs available today might be suspended by the time you are ready to buy.
- Interest rates are headed up. Even if home prices decline by another 10 percent, if interest rates increase by 1 percentage point, the monthly payment will be the same.
- Higher interest rates alone will move some borrowers to being unqualified.
- Those who are eligible for the 1st time homebuyer tax credit will lose out if the purchase can’t close by the end of November 2009.
The best route to take is to find a home you love and move the transaction along as quickly as possible so you are confident you can get the transaction done. Buyers should not lose what they can get now while waiting on a wish for what could be available tomorrow.
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