The answers to five common questions Buying a house in 2008
Q: I have to wait until house prices go even lower before buying?
A: No, just because no one can accurately predict the peaks and valleys of the stock market is the same thing about the house. If what you think is the absolute best deal wait, you can wait for years. All the market fundamentals show that now is a good time to buy. The prices fell, interest rates near historically low levels, and there are many homes to choose from.
If you buyNow it will not be in the driving seat during the buying process, you can also reap the gains of price appreciation. Do you remember, were those who bought homes in the early 1990's during the last big economic and housing crisis, as the big winners.
Q: I have to wait until they exit the market at the same price, my neighbor at home, when he sold two years ago?
A: No, it's always better to trade in a buyer's market. While the value of your home has fallen,house prices are also high-end fell. Here's an example:
Your neighbor sold for $ 300,000. Values in your area have declined 10 percent, then you could only $ 270 000 for your home today. Your eyes are on a train back home, which previously sold for $ 500,000, but now is sold for $ 450,000. If your home sells for 270 thousand dollars and bought a bigger house for 450 thousand dollars, the price difference is $ 180,000.
But if you expect to recover 10 percentValue to your home and sold it for $ 300,000, can also move up house price increase of 10 percent to $ 500,000. This is a price difference of $ 200,000. So by selling today, it would really save $ 20,000.
Q: Interest rates are falling. I have to wait until they go even lower before you buy a house?
A: Interest rates for 30 years, are currently fixed-rate mortgages under 6 percent and are extremely favorable for buyers. In fact they are hovering near 30 yearsDepth. But waiting to time the market is a dangerous game. Even those who follow the market for a living can not figure out when interest rates are falling. If they could, they would all be millionaires.
And housing prices do not necessarily move in line with interest. Then decide if the time to buy a house and the price dropped $ 10,000 from where it is today, you can still end up losing money. How? When interest rates by half a point in this periodsavings in reduced price for a house would be more than the monthly payment would be higher over the entire duration of the loan balance was.
Q: I have $ 10,000. Should I buy the money in the stock market or a house?
A: Buying a house is by far the best long-term investment. For example, say $ 10,000 to buy a $ 250,000 house and the house appreciates a modest 3 percent in the first year. This means that after a year, the house would be worth it$ 257,500 or a gain of $ 7,500. Instead, the firm would put $ 10 thousand in the stock market and the publication of such an increase of only 5 percent net return on invested capital $ 500.
And do not forget the tax incentives. In most cases, all mortgage interest and property taxes can be paid in a given year to be fully deducted from gross income to reduce taxable income. These deductions can save you thousands of dollars in tax revenues, especially in the early years of the mortgage when interest makesmost of the payment.
Q: I am buying my first house but can not afford at home, what I want. It 'better to keep renting and hope of even lower prices
A: If you continue to wait, you can never afford to enter the housing market. In addition, the property prices are currently moderating or falling, depending on where you live, rents continue to rise. If you buy a house, you are also purchasing price stability, knowing that the same monthly salaryPayment for the life of your 30 years, fixed rate mortgage.
Once you become a homeowner, you have to take the benefit of tax deductions that homeownership offers, and you begin to build equity in your property.
With so many homes on the market to choose from, it can be the best strategy to restore the expectations for your dream house starter. After a few years, you can sell stock to the gains of goodwill and move to a bigger house. Before making the jumptenants to create homeowners, before starting, and greater prosperity for your family and enjoy the pride of ownership.
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