Now Is The Time To Buy A Budget-Friendly Home
There is some good news during this recession. If you’re in your mid to late 20’s, have a job, and are looking for a home, there are some great real estate deals out there. Securing a mortgage may be tougher, but banks are keen to make sure you can maintain the mortgage, leaving you less open to defaulting. Getting into a starter home is probably easier than it has been in years, as long as you have a good credit rating. The down payment may be 10%, but over all prices have depreciated significantly in many markets making housing more affordable for many young people starting out.
Be Conservative
Even if you are married and you both have a great job, the traditional wisdom is to only put 30% of your income into housing. This may work when both of you are working, but what is the plan if one of you gets laid off? A more conservative approach is to make sure whatever home you get can be easily affordable on a single income, so that it provides a buffer against job losses. It can also be a great way to plan for another addition to your life - a baby.
Avoid Fixer-Uppers
The romance of fixing up your own home disappears when the skills needed are carpentry, electrical, and flooring. Many of today’s consumers want to have homes that look like they were featured on HGTV, but the truth is they haven’t the skills to remodel them into that vision. Hardwood floors and granite counter tops are expensive, but even more so when you are paying someone else to install them. Buy the house that you want, as is, and avoid fixer uppers that will drain too much discretionary income from your pocket. If you have to sell very quickly, the house will already be in a condition that meets the major market demand for contemporary updates and you won’t have to price the house down further. Avoid foreclosures as many of these homes, while cheap, come with structural damage that need professional help.
This entry was posted on Friday, September 18th, 2009 at 9:30 am and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
