Ignore the Headlines!

I read a great article that stated to ignore the headlines.  With the economy having all the woes of recession talk, its hard for people to decide when to buy real estate.  Historically, people who have made the most money in real estate typically buy in these times. 

If you are emotionally ready to be a homeowner, have good credit, plan to stay put for five years, and have been waiting for the perfect entry point, it’s time to get serious! You can avoid the inevitable rise in interest rates, which will wipe out your advantage.  The thing that will make home prices stop falling will probably  be the same thing that raises interest rates. 

Say you put down 20%  on a $220,000 home and get a 30 year fixed rate mortgage at 5.5%.  Your monthly principle and interest payment would be $995.  Let’s say in 12 months that same home sells for 10% less, so if the home was at $220,000 it sells for $195,000.  Remember, when the home prices start going back up,  interest rates will, too.  If your mortgage rate on $195,000 is 6% your monthly payment would be the same as the purchase at $220,000 with a 5.5% interest rate.  It saved you nothing and your payment would be the same for the next 25 years.

With that in mind, don’t forget what a great Buyer’s Market it is right now.  Sellers are continuing to negotiate and give buyers what it takes to sell their home.  When the market takes a turn this will not be the case.

Think Long Term–and get off your thumbs and get your home that you always wanted!