Should I Buy a House Now or Wait Until 2010 to Buy?

Should I buy a house right now or wait until the market improves? This is a common question among first-time home buyers. And with so many negative news stories about the economy and housing market, it's easy to understand why. It can be downright scary to make a large purchase in a bad economy.

In truth, however, 2009 could be a great time to purchase a home. Of course, only you can decide whether to buy a house now or wait until later, but you should make a well-informed decision about it. So let's talk about some of the benefits of buying a house in the 2009 economy.

1. Low Prices

In many cities across the United States, home prices are at their lowest point in decades. It's bad news for homeowners, but it's good news for buyers. Nobody can predict how far they will continue to drop, or when we will hit the so-called "bottom" of the market, but your home buying dollar certainly goes a lot further right now!

2. Low Rates

Much like home prices, interest rates are also at their lowest point in decades. At the time of this publishing, a well-qualified borrower could qualify for a mortgage rate of 5% on a 30-year fixed loan. By most predictions they will stay below 6% for the remainder of 2009. Experts predict they will stay in the This is one of the first things I point to when somebody asks, Should I buy a house now or wait until later?

3. High Inventory

Because of the housing crisis, there are more homes on the market right now than there have been for quite a while. Drive around your neighborhood and you'll see what I mean. So in addition to the good deals you can get, you'll have a wide variety of properties to choose from. This is another good reason to buy now instead of waiting until 2010.

4. Tax Credits

If you buy a house before the end of the year, you'll qualify for a tax credit of up to $8,000. This is part of the government's stimulus plan to get people buying, and you can learn more about it in the Home Buying Institute's tax credit guide.

Should I purchase a home now or wait until later? It's a common question among first-time buyers right now. Here's the bottom line on this subject. If you can get qualified for a mortgage loan (good credit score, sufficient down payment, etc.), this could be a very good time to buy a house. You'll have many homes to choose from, you could save a lot of money, and you might even qualify to a tax credit. What else could you ask for?

Let me close by saying this. I'm not in the market for a new home right now. But if I was, I would certainly take advantage of the market conditions in 2009. I wouldn't wait until 2010 because I think prices are going to start rising then. Mortgage rates will probably be higher then too. So I would buy a house now instead of waiting. But that's just me.

Real Estate Purchase Agreements Online

These days, you can find just about any type of real estate form online. In some cases, you can even get them for free. The same goes for the real estate purchase agreement forms needed when buying a home. So in this blog post, I thought I'd take a break from writing about mortgage loans in order to share a list of useful websites.

Here are some of the places online where you can find free and low-cost purchase agreement forms, as well as other real estate paperwork. Please note that the legal requirements for purchase agreements vary from one state to the next. So before buying a real estate form online, you'll need to do some research to see what your state requires.

Find Purchase Agreements Online

I am not endorsing any of the websites below, but simply presenting them for your consideration (and to save you some time).

• http://www.ilrg.com/forms/realestate-purchase.html
• http://www.lawdepot.com/contracts/real-estate-purchase-agreement/
• http://www.lectlaw.com/formb.htm
• http://www.alllaw.com/forms/real_estate/assignment_of_real_estate/
• http://www.totalrealestatesolutions.com/realestateforms
• http://www.legalwiz.com/free-forms
• http://www.urgentbusinessforms.com/purchase_agreement.asp
  

LegalZoom.com is another website worth checking out. They have a variety of other legal forms available for online purchase. They have some real estate items, but at the time of this article they did not have any purchase agreement forms available. They might be helpful in other real estate areas though.

The real estate purchase agreement is a pretty standard document, across the board. But there are some light variations from state to state. You can probably find information about your particular state's legal requirements on the official website.

House Buying Questions - 7 Frequently Asked Questions

Through our "sister site" over at HomeBuyingInstitute.com, we have answered hundreds of house buying questions over the years. It's natural to have a lot of questions when you buy a home for the first time. It's a sign that you have a curious mind, and they realize the importance of research and education.

We thought it might be helpful to create a list of the most frequently asked house buying questions we have received over the years. We are also getting some new inquiries as a result of the current economic crisis we are experiencing. We have provided answers for those questions as well.

So without further ado, here are some of the things people want to know when buying a house for the first time:

1. Can I afford to buy a house?

It certainly makes sense to start with this question before you research anything else! To be more specific, you should be asking: "Can I afford to buy the kind of home I want?" To answer this house buying question you will need to examine your finances.

Take a look at your income and your debt. Determine how much of your gross monthly income is left over each month after you have paid all the bills. You can exclude your rent from this equation, because that monthly expense will go away if / when you buy a house. The amount you have left over is the amount you can leverage to make a mortgage payment each month. This is a good starting point for setting your house buying budget.

Next, you should start to familiarize yourself with mortgage calculators. You can find them online, and most of them are free to use. Using a calculator, you can take the price of a house and break it down into estimated monthly mortgage payments (for a 30-year loan, for example). This will give you a ballpark idea of how much house you can afford.

2. How do I start the process?

This is another common house buying question among first-time buyers. I always tell people to start with thorough review of your financial situation. We touched on the budget factor above, but you should also get copies of your credit reports and scores (you have three of each) to see where you stand. Lenders will use your credit score, your debt-to-income ratio and other factors when deciding whether or not to loan you money.

If you find out that your credit score is low, you're going to have a hard time buying a house -- especially in our current troubled economy. So you should focus your time and energy on rebuilding your credit so that you can qualify for a mortgage in the future. You also need to review your credit reports to make sure they don't contain errors, because this can also hurt your chances of buying a house.

Start here: Fico Scores/Reports

3. What if my credit is bad? How do I improve it?

This is a question many people are asking when trying to buy a house today, and it has to do with the economic crisis we are going through. Mortgage lenders are becoming stricter with their qualification criteria, so you really need to focus on maintaining a good credit score. If you find out that it's low (and you will know if you apply for a loan and get turned down), there is plenty you can do to improve it. This article explains some of the things you can do to boost your score quickly.

4. Which type of mortgage loan should I choose?

This is an important house buying question for many reasons. It's also a question you must answer for yourself. There are many different types of mortgage loans, but most of them can be classified in one of two ways -- they either have a fixed or an adjustable rate. There are also hybrid loans that combine certain qualities of both the fixed-rate and adjustable-rate loan. For more information, refer to this article on choosing a mortgage type that matches your house buying situation.

5. Do I need a real estate agent?

If you are buying a house for the first time, of if you're buying in an area you're unfamiliar with, I recommend hiring a professional real estate agent to help you. You probably have a lot of questions about the house buying process already, which is a perfect example of why you need professional guidance. The real estate terminology alone can be confusing enough. A skilled agent can help you navigate the process and avoid costly mistakes along the way.

6. How can I buy a foreclosure home?

This is a very common question right now, because there are more foreclosure homes on the market than ever before. Last month alone, more than 80,000 homes were foreclosed upon in the United States. When a bank is forced to foreclose on a house because the homeowner stopped making payments, they will try to sell it off as quickly as possible to avoid further losses. They often do this through a real estate auction process.

In most cases, the bidding at an auction will start below the market value of the home. And unless there's a bidding war that drives the price up, the property could be purchased at a great price. This is what attracts people to buying foreclosures in the first place -- it's a way to save money.

With that being said, I am hesitant to recommend it for a first-time buyer. The regular house buying process can be confusing enough for a "newbie." But when you add in foreclosure laws and all the rest, it can become too much for a novice to handle. On top of that, you would need to pay cash in order to buy a house through an auction, and not many people can afford to do that.

7. What happens at the closing process?

The real estate closing (also referred to as settlement) is when the house if officially transferred from the seller to the buyer. You'll be asked to sign a lot of paperwork, and all of the money that has been held in escrow will be distributed -- the seller will get a check for their proceeds, the real estate agent(s) will be paid, etc.

The important thing to understand about a real estate closing process is that there are certain costs involved. You should get an estimate of these costs in advance, when you get approved for a mortgage loan. This is referred to as the "good faith estimate." Just realize that these initial closing cost estimates are usually low, so you plan on paying more than what the lender tells you up front. A day or two before the actual closing date, you should receive a HUD-1 settlement statement that tells you exactly what you'll owe at closing.

Learn More About the House Buying Process

You probably have additional questions about the house buying process, in addition to those listed above. If so, we recommend perusing the following articles on our website:

• Your No-Nonsense Guide to Buying a Home
• 101 Steps to a Smoother Home Purchase

I hope this tutorial has answered some of your questions about purchasing real estate, and I wish you well on your journey!