I still believe that owning a home is one of the surefire ways to increasing and solidifying your financial future. Obviously, the recent sub-prime mortgage crisis affected all of us and our perception on real estate. I do feel strongly about not buying more of a home than you can afford, having a decent amount of down payment saved, and not taking advantage of your home equity line of credit. With that being said, there is no better time to buy real estate, especially if you are a first time homebuyer. So get preapproved, put together your financial papers, and save that down payment money. While I do not have the statistics to prove, I know for a fact that my clients that are homeowners have a higher financial net worth—no exception!
Here is why I am saying yes to real estate:
- Interest rates are still incredibly low and the Federal Reserve has promised to still keep them low. Interest rates for a thirty-year fixed mortgage are 4.8 percent and for a fifteen-year 4.1 percent as of February 2, 2011.
- Real estate prices are rebounding. Prices are up 4.4 percent from last year (S&P/Case Shiller Home price index).
- It is a Buyers Market. Buyers have the upper hand to negotiate prices, closing costs and repairs they want done before closing.
- Not sure where to look? Check out Money Magazines Top 100 places to live.
- Another place to examine cities is this list with the Top 100 performing public high schools in the US.
- Appraisals are coming in lower, which means lower real estate taxes in the long run.
- Contractors are discounting their fees if you need renovations and material prices are lower by 30 percent from the last few years.
- If you need a short term HELOC (home equity line of credit), rates are still low at about 5 percent. Note: This is a floating rate so be sure to have a plan to pay it off within a year or two and use it primarily for home renovations—not a vacation!