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To Buy or Not To Buy…
That is the question…Look, I hear people asking all the time “will the market get better for buyers” my answer is NO! Most people who are looking to buy a house are doing it for need not just an investment. Whether you are first time home buyers and throwing that rent check each and every month or you are jumping up to larger home or even down sizing…the time is right now.
Waiting for that 1/8 or even 1/4 point lower on rates is a gamble and the only benefit you may capture by waiting. If you have the money to put down and you feel your jobs are secure in this wild economy…then go for it.
The benefits out way the risk, you still have monthly fees and in some cases it will be lower than rent! Start gaining equity for yourself and fulfill your needs whether its larger bedrooms, that bigger kitchen, the third garage stall…the best deals are happening now!
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Builders and Bankruptcy
If looking for New construction insure your builder is financially secure. I have heard on more than one occasion where people buying new construction have been burned on work liens, not enough money to finish the job etc. Do your home work and check in to the builder before you begin the process.
MW Johnson has recently filed bankruptcy in all of their developments and each development will go back to the respective bank who funded the project. Title should transfer sometime this month. The uncompleted units, should in most cases be treated as “New construction” and would still give buyers options to pick all the colors and styles of the furnishings. Protect yourself and your investment!
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Rent Your Current Home
This is by far the best opportunity buyers have had to get their new homes at fantastic prices. However, so many people in today’s market are unable to sell because of low or no equity in their homes, they are essentially “upside down”. Don’t let that stop you from buying, there is still a way to get your dream home…rent your current one! The rental market is strong and will only become stronger in the months to come. There are many benefits to renting your home. It can allow you to get into something different and provide a monthly cash flow. Even if your rent it for less than your mortgage, your tenants are still paying down the mortgage every month. There are many tax advantages you can benefit from depending on your individual situation. As far as qualifying for your new home…as long as you can provide a signed lease agreement, that revenue is classfied as income in your debt to income ratio and will have little effect on your purchase power. Over time the market will come back and with appreciation. You can sell it then in a more favorable market or decide to keep it and add to your monthly cash flow. It can be a risky business, you’ve heard the horror stories with people trashing the homes, paying rent late or not at all, noise complaints etc. Well if you can stomach the risk and take your time researching your potential tenants it can be a very enjoyable and profitable experience. Examples of rental forms can be found on the web all though I do recommend having them drafted by an attorney. There are many other factors to consider when renting your home like your city ordinance/license, deposit amounts, check lists, the safety of your home and tenants, length of lease, rights of the landlords, right of tenants etc. Take your time and do your homework…it is a great alternative and allows you to make your next move!
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