3 Steps to Buying A House For The First Time (In TODAY’S Market)

3 Steps to Buying A House For The First Time (In TODAY’S Market)

First, let’s start by saying that pretty much anyone who’s tried to buy a home in the last 10 years or so probably has an odd view of the housing market: From sky-high prices and easy financing at the height of the housing bubble to the rock-bottom prices and sea of foreclosures – not to mention much tighter financing – of just a couple of years ago, the market has been giving the appearance of instability and unpredictability to those unfamiliar with its long history.

Of course, that’s pretty much all due to the banking fiasco that allowed – even encouraged – the writing of unrealistic loans on properties that were assessed at highly inflated values. For most of its history, the U.S. housing market has provided one of the most stable investment arenas around.

Navigating today’s housing market requires a different mindset than of just a few years ago. Here are 3 steps to buying a house for the first time (In TODAY’S Market); important factors to keep in mind to make sure you get the best deal:

ACT NOW!

This is the first and arguably most critical step. Unlike a few years ago – or even a year ago – when mortgage rates bottomed out at all-time lows, the market and unemployment levels are much more stable now, and interest rates have begun to rise in response to those indicators. Chances are, you won’t get a better rate by waiting around, so start comparing rates and doing your homework, and then lock in your rate as soon as you’ve found the best mortgage for your needs.

Be Realistic About What You Can Afford.

Avoid getting into the same trap as homeowners a few years ago who ended up taking out mortgages that were far more than they could realistically afford. Many of those mortgages were adjustable-rate or interest-only mortgages, and while they can be good deals for some people, you have to be ready to assume the often considerably higher monthly payments once they adjust. Read up on different types of mortgages and make sure you choose the type – and amount – you can truly afford.

Know The Home’s Real Value.

As the market has gone up and down, homes have been listed at widely varying values, part in response to homeowners who are upside-down in their homes (owe more than the home is worth) and who hope to get a high price to help them pay back their loans. What’s more, the market’s had a flood of bank sales which can also skew values. Ask your real estate agent for a list of comparable sales in the area for the past year and do your own homework through Zillow.com and other sites that let you research past sales to make sure you don’t overpay.