One of the many benefits of writing for a real estate blog is that I get to hear about all of the recent news and updates in the real estate industry. Now, I know the industry is going through some of the toughest times in recent history, but not all of the news in real estate is bad, especially if you were fortunate enough not to purchase a home during the escalation of the bubble. If you were one of the lucky ones, now can be a perfect time to take advantage of the current real estate market by purchasing a new home.
After my wife and I took a look at the numbers we were paying to rent our home, we quickly realized that we could actually own a home for less than we were paying in monthly rent. Once we figured this out, it was really an easy decision to start looking for a new home. Let’s see … we can continue to pay someone else’s mortgage for them OR we can start to invest in our future by purchasing a home to live in. Umm, we’ll take option B please. We look at it as our way of helping to stimulate the economy and housing industry, as well as investing in our future.
One of the major lessons learned by watching the housing crisis unfold is that we definitely need to live within our means. Of course we dreamed of buying a beautiful condo in San Diego, but our goal was to live beneath our means by purchasing a home that we could actually afford. For us, this meant making a conscious decision to spend considerably less than what we were pre-approved for. A lot of people got into financial trouble because they purchased more home than they could afford. Because we have seen so many people become house-poor, we decided to buy a house in a more affordable area.
Great Reasons to Buy a Home Now:
Mortgage Rates – Take advantage of the fact that the government is trying to stimulate the housing industry by reducing the cost of borrowing money. 30-year fixed mortgage interest rates and 15-year fixed mortgage rates have hit all-time record lows. This means that when you do decide to purchase a new home, you will be paying far less to borrow that money over the life of the loan, especially if your credit score is above 700.
Home Prices – Home prices have been hit really hard in the last couple of years, and due to a rise in demand for home rentals, rental rates across the country are steadily increasing. You heard that right; it is becoming more expensive to rent a home, in certain areas, then it is to actually purchase a home of your own. It is always a great investment idea when you can buy low and sell high.
VA Loan – One of the many benefits of serving in the U.S. Armed Forces is the VA loan. Basically, the government says thank you for serving our country by guaranteeing a veteran’s home loan with the bank, and they also do not require any down payment. Even better, the VA funding fee has recently been reduced in an effort to increase home loans.
In the end, we were able to buy a brand new home, in a great area, that fit within our budget. We couldn’t be more excited about our chance to live the “American Dream.” I realize this might not make financial sense for everyone, but if you are in a similar financial situation, buying a home can be a great move given the current conditions of the housing market. Just make sure to plan on staying in your new home at least five to 10 years.
Are you considering purchasing your first home? I’d love to hear about it in the comments below:
Chris Apple is a real estate blogger who writes at Real Estate Communities. He specializes at marketing in the real estate industry and can be found on Twitter, Facebook and Google +.