Reasons to Buy a Home Now

If you’re currently in the market to purchase a new home, there are several reasons why this financial move is a good idea. Keeping these positive points in mind can help you to choose the right house, in the right neighborhood, with all the features that you and your family need. Here are just a few factors that could land you in an affordable home very soon.
 If you’re buying a home for the first time, or looking to upgrade, you don’t have to rush to purchase a home. This is because prices may fall a little more, due to foreclosures and more stringent credit requirements. However, it’s best not to wait too long, because prices probably won’t be much lower than they are now. Professional home price tracking companies indicate that the average price nationwide will decrease significantly for about six more months, then remain in place for the next there or four years.
Also, houses haven’t been this generally affordable since 1991. Economists have defined “affordability” as the ratio of average home price to a family’s median income. Fiserv Case-Shiller, a corporation that tracks home prices, states that the U.S. ratio is currently 2.6. This is a decline from the peak of 4.1 in mid-2005, and the previous long-term average of 2.8. There are still some areas of the U.S., of course, that may never be classified as affordable.
For instance, the coastal cities of California and the New York metro area fall into this category; the affordability ratio is 5 or more in these areas. You can also determine affordability by looking at average mortgage payments. Since the housing market peaked in 2006, the median principal and interest payment has decreased from $1,063 to just $645.
It’s pretty safe to assume that mortgage rates aren’t going to get any lower. Lender giant Freddie Mac predicts a 30-year fixed rate of 6% by the end of 2012. You’ll also need to have a credit score of at least 740 or higher and a down payment of no less than 25% to receive the absolute lowest rates.
If you don’t meet those requirements, you’ll be paying interest-rate risk premiums if your bank is selling your loan to Fannie Mae or Freddie Mac. For instance, a lender has to charge an additional 0.25 point if a borrower has a credit score of 740, but puts down less than a 25% down payment that is at least 20%.
Essentially, home ownership is still appealing. Buying a home is often the largest purchase that an individual will ever make. That’s why it’s important to shop with the details of your ideal home in mind, and to exercise patience in the process.
For more information on great Rancho Santa Fe Homes, contact Lucy Kelts for a no-pressure real estate consultation.

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