|
|
|
        |
It's A Buyer's Market!
Lynne Ruffin Evening and weekend appointments welcome!
|
|
|
Are you prepared? Great market!Now is one of of the best markets in our history for buyers ever. Interest rates are at all time lows and housing prices are more affordable than ever. Combine the two factors and you have a win-win situation. Tough Economy!No doubt this present economy has been tough. If you are looking to buy a home it is one of those opportunities to turn a lemon (our sour economy) into lemonade. Short sales, distressed property sales, bank foreclosures, property abandonment, company downsizing, divorces, job loss, need for cash, and a myriad of other factors have led to home prices being set very competitively to move quickly. It is an opportunity for buyers to capitalize on investment opportunities. Over time real estate has proven to be one of the strongest investments ever! Don't Give Up Take the Plunge!
Pay close attention to your debt-to-income ratios.If you have champagne taste don't live it on a beer budget. Learn to sacrifice now to be able to afford the champagne items in good taste later on. If you are living paycheck to paycheck why purchase an item of convenience which will take you 12 paychecks a year and 60 paychecks over five years to pay for? Most often a bad investment is one where you absolutely know going in the item won't be worth it's weight in paper (dollars) in five years. As soon as you drive the item off the lot or take the item out the store it has lost value. And on top of that you financed it? Not! Unfortunately items of convenience are most often the number one show stopper when it comes to prospective buyers purchasing a home. Think sixty times before purchasing items of convenience!If you are thinking about home ownership you may want to think about your spending and credit practices now, especially if you are looking to buy your home via credit (mortgage). When you go to purchase a home on credit the items on your credit report will be very important. They will be factored into your debt-to-income ratio. Too much debt normally equates to a home much less than you want.
|
|
In the sample examples below, which equation below would work best for someone planning to buy a new home? |
|
A. New car on credit + new furniture on credit = no house (too much credit)
|
|
B. Budget + Savings = House (Great Credit and Money to Go to Closing!).
|
|
It's almost a misfortune that when people are renting a home it doesn't
matter how much their car payment, furniture payment, etc. are in a lot of
cases. The norm seems to be renters can rent as long as they have
the income to do so and they can buy a car as long as they have the income
to do so. The property owner figures the tenant will pay the rent
because they have to have somewhere to live and the lender for the car
pretty much feels the same way the person has to have a car to drive.
Scenario a person rents a dwelling and buys a new car. All is well
and good. After the first year the landlord decides to go up on the
rent $100. They now have the rental payment, the car payment, and
probably also a furniture bill. Things seem to happen in the order
of place to rent, car payment, and then of course the apartment needs the
latest and greatest in furnishing. Now the tenants are comfortable
and like living on their own and are thinking about homeownership.
However, because of the rental car payment and furniture bill they can no
longer afford to buy a home. Buyer
Perspective: The rental payment is not factored in
because once the future projected mortgage payment is factored in.
Even if the future projected mortgage payment is less than what the
prospective buyer currently pays in rent they don't qualify. The
question agents get asked most often is "Why?". Doesn't Mr. Lender
understand they prospective buyer has to have a car to drive back and
forth to work and don't they also need furniture to sit on.
Lender Perspective: Why are they
buying a car with no where of their own to park it and why are they buying
furniture with no where to put it? Agent
Perspective: I don't know I want to sell them a house.
Reality: If the debt to income
ratio is too high, purchasing a home on credit will not happen until you
it is lowered. Don't borrow against your future haphazardly invest
in it wisely.Rent vs. BuyWhile you are renting chances are your rental payment will not be a factor when you go to purchase a car on credit, buy furniture on credit, or having a spending spree on credit. The biggest reason is because you don't own the property you're renting. Non-payment normally leads to an eviction. Refund Tax Time is Upon Us!One thing about a financial crisis is you learn by default how to better manage your funds and situation to rebound successfully. Always think positive! Your mindset can be half the battle and don't lead a life of self-destruction. Don't just listen to people who tell you all you want to hear but lean your ear towards those who tell you what you need to hear. Even it may be a little uncomfortable and you may take offense to it. Take strong positive advice and use it to help turn things around. Buy your slice of the American pie. The plan should always consist of continually moving forward no matter what adversities or situations you are facing. Just because you can't buy a home today does not mean you won't be able to tomorrow. Take the advice you get if you are turned down today and use it towards making for a better tomorrow. If you keep at it bit by bit things most often than not are bound to get better. If you do nothing expect nothing. If you are one of the fortunate ones to receive a refund at tax time. If you have existing debt strongly consider paying off your debt or at minimum paying it down. You will thank yourself for it later. The $3,000 pocketbook can wait until you have another r$3,000 to put in it. Especially considering you can take about one half of that amount and be on your way to home ownership. Buying Advice
|
During
these challenging times more prospective buyers are facing credit
challenges due to job loss, low wages, child support obligations, student
loan debt, high gas prices, increase in food cost, car maintenance and
repair, and too many other issues to list here. It amazes me with
home prices being more than affordable than ever and interest rates at
record lows why more first-time home buyers are not taking the plunge.
I encourage those prospective buyers who really want to purchase to look
forward to getting a home while the getting is good. Evaluate all
the resources available to help you purchase a home. Most areas have
programs geared towards increasing the number of home owners. Home
owners add to the stability of neighborhoods and areas. Check with
your local housing authority, the Department of Housing and Urban
Development website, and other consumer agencies for resources, grants,
funding, and initiatives towards housing. If you live in the Hampton
Roads area I will be more than happy to furnish you with a list. You
don't want to drive someone else's car so why would you want to live in
someone else's house? The number one reason I've heard in my career
as to why a person doesn't want to buy is because they don't want to do
the maintenance, upkeep, and repairs for a home. However, they do
the maintenance, upkeep, and repairs on a used vehicle that won't even be
any good to them in a few years. Instead of focusing on all the
reasons why not buy a home. Right a list of all the advantages home
ownership affords. Better yet, ask someone who is a homeowner as a
courtesy to write you a list of the pros and cons of homeownership.
