Right now, many home buyers are worried about the state of the real estate market. It is making them somewhat reluctant to get mortgage financing for a home they are fearful will decline in value. While this is a valid worry for those who buy homes for the purpose of flipping them, if you are buying a home to live in, or as investment rental propert, it could be a good time to buy.
Free Money Finance reports on 5 new rules from Money magazine for home buying in the current real estate market:
- Stop trying to time the bottom. Many people are trying to figure out when the market will bottom, and then make purchases then. This is something that is very difficult to do, and you will likely fail. Consider: This is the best buyers market in about 20 years. It's hard to go wrong -- eve if you don't find the bottom.
- Mortgage rates. Even though homes are popping up on the market all over, the mortgage market is in upheaval. Mortgage rates might not move lower, despite the increase in the supply of homes. This is because mortgage lenders are reluctant to issue home mortgage loans. So financing is goint to get tough.
- Jumbo loans. Jumbo loan home mortgage rates are falling. And the federally sponsored home mortgage loan agencies have clearance to offer their support for larger loans. If you can afford a home that costs more than $417,000 (but is still a deal and $500,000 or $600,000), now could be the time to buy.
- Buy where the schools are better. Areas with good schools generally retain their value better. So, while it won't be as cheap as buying elsewhere, you can still get a good deal. And when the real estate market recovers, you will be in a good place.
- Look for a good real estate agent. Watch out. Since most commissions paid to the real estate agent (even the buyer's agent) are paid by the seller, you need to watch out for agents that may not be looking out for your interests. Some sellers are offering cash to buyer's agents to help get a better price in the falling real estate market.
If you plan carefully, you can get a great deal when buying a home.
image credit: sxc.hu
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