April 01, 9:56 AM
Lately I can't tell you how often I have heard the term, "It's a buyers market" when people are talking about the real estate conditions of our country right now. There are many people out there who are hearing this and thinking that it might be the right time to stop renting and look into owning a home.
People are saying its the time to buy and a young renter can be tempted by sliding prices, but no one is telling you about the risk. There is the risk of credit dangers and/or owning a home that you owe more on than its actually worth.
One of the biggest keys in the fact that this might actually not be the best time to buy is due to the "credit crunch." Because of this, lenders have tightened the reigns on the requirements for a home loan. Where before, putting only 5% down might have been sufficient, now new home buyers are likely to need to put 10% down and still have the banks and loan entities eyeballing every single part of their credit history for mistakes or faults.
So these days it may be hard to get a loan and with closing costs and a huge down payment, you may not have the cash to offer up front.
If you can afford to though, should you go ahead and buy? The answer is again, probably not. Sure, the prices of homes have fallen an average of 3.3% over the past year, but all signs point to these prices continuing to decline. Would you buy stock in something that would be worth less next year than what you bought it for? I think not.
The most important thing to remember here is that you don't want to be "upside down" in your first home.
So to me the answer is simple: CONTINUE RENTING AT YOUR AWESOME APARTMENT COMMUNITY! I'll give you 5 more reasons why renting just makes more sense:
1) Rent is cheaper on your bank account every month
2) Your electric bill is much smaller than it will be in a home
3) You have maintenance included in rent
4) You have access to a number of facilities including fitness center, pools, etc
5) It's much more fun and when you are ready to move, you aren't locked in to a 30 year mortgage!
I may be renting for life and I love it!