Tag Archives: Time

Buying A House In A Recession Time – Pros and Cons

Buying a house in a recession time has both pros and cons, and both of these aspects should be examined before this move is made. During a recession the US economy is down, the housing market and home prices are depressed, and there are high unemployment numbers. Consumers tend to become nervous about making big purchases or long-term financial commitments, and lenders require great credit to even consider a mortgage loan. With all of this it can make sense for some individuals to purchase a home during these economic times, as long as the pros outweigh the cons. A careful evaluation should be done to examine the individual situation, and this can help determine whether the advantages of buying a home during tough economic times are worth the drawbacks.

Pros: There are many advantages to buying a house during a recession. As long as you have a 700 or higher credit score and can provide a 20% down payment most lenders will offer a mortgage. In a recession housing values often plummet, and this means that you can get a home for much less now than you could five years ago. There is a wide range of homes on the market, and these include foreclosures as well as private sellers. The current mortgage rates and interest rates are incredibly low, and the homes on the market are priced at fantastic savings in many cases. Another pro is that first time home buyers can take advantage of tax credits worth thousands of dollars. In addition to a large number of foreclosures many home owners have found themselves underwater, and may be extremely motivated to sell. The housing market is a strong buyers market right now, making it an ideal time to buy for many.

Cons: While there are many benefits to buying a house during a recession it is important to remember that there are also drawbacks as well. During a recession the future economic outlook is not clear, and there is a lot of uncertainty. Home prices could continue to fall after the home is purchased, causing you to lose value and equity quickly. You could end up losing your employment if your employer downsizes or closes the doors, and this could make it impossible for you to stay current on the mortgage payments. In tough economic times many people move to a better location, and if you have purchased a home this may be difficult to do. The rising cost of fuel and food may make finances tight, and this could result in foreclosure in the future.

Buying a house during a recession will make sense for many people. You can get a larger and higher priced home for less thanks to dropping home values, but this could also be a drawback as well after you have made the purchase. This method can be very beneficial for many, but it is not right for everyone. For some individuals the drawbacks of this purchase and the uncertainty caused by the poor economy mean that now is not the time to purchase a home.

Is There A Perfect Time, To Buy, A House?

As someone, who has been a Real Estate Licensed Salesperson, in the State of New York, for over a decade, as well as having, also, had a considerable degree of experience, in financial sales and advising, as a financial planner, and Registered Representative, Supervisor, Manager, and executive, I have often, been asked, when/ if, there is a perfect time, to buy. Whether this is related to buying stocks, bonds, or other investments, or buying a home, the attempt to market – time, has rarely worked, consistently. While, with other investment, a disciplined approach, works best, in most cases, in buying a house, the best approach, is probably, proceeding, in a well – considered, introspective, objective manner, and honestly knowing and understanding your personal needs, goals, priorities, comfort zone, and personal finances. With that in mind, this article will attempt to review, consider, and briefly discuss, how, although, there is no perfect time, it is wise to consider, when it’s best, for you.

1. Personal needs, goals, priorities: Why do you want to buy a house? What about a particular house, attracts you? How many bedrooms do you need, and how many would you prefer, and why? How about bathrooms? What do you seek in your kitchen, and why, and what do you actually, need? Are you able to look past the staging, etc, to determine the difference between quality, and perceptions?

2. Comfort zone: Sit back, and look, objectively, and introspectively, so you know, why you want a house, what you can afford, and what amount of monthly payment, might conform with your personal comfort zone. You don’t want to end up, house – rich, and unable to proceed, with less stress, etc! A wise home buyer, finds a house, which exceeds his needs, meets some of his wants/ dreams, and does so, without excess stress, tension, and/ or, hassle!

3. Personal finances: Do you know, what you can afford? Many factors should be considered, including, down – payment, reserve for items such as contingencies, repairs, renovations, utilities, etc. Simply because you have the down – payment, and qualify for a mortgage, doesn’t necessarily mean, you will be well – served, by the financial necessities of home ownership! Know yourself!

4. When matters!: Certain factors are extremely important. What are the present mortgage interest rates, and how large, a mortgage will you need? Understand, small changes in these rates, matter! What about supply, and demand? Don’t purchase something, you aren’t satisfied with, either to Keep up with the Joneses, or to take advantage of the present market, because if you do, you might be disappointed, in the long – run!

Be a smart home buyer. It’s not about trying to buy at the perfect time, but finding what you need, not over – paying, discovering something, you’re pleased with, and being able to afford it!