Buying a Home in Changing Markets

By Karen Lawson Columnist

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You've heard the news about declining home prices. You're ready to buy your first home, but don't want to buy when prices may continue to fall. When is the right time to buy? Although there is no "official" answer, your finances, lifestyle, and whether you plan to stay in a location can help you decide when to buy, and how to choose a new home loan.


Finding a Mortgage that Works for You

A mortgage is a significant component of buying a home. You'll have many mortgage products to choose from, and new home loans are designed to accommodate everything from the reliability of the traditional 30 year fixed rate mortgage to newer "exotic" mortgages offering lower initial payments. Although first time buyers will often consider any type of new home loan, the amount of time you plan to live in your home can be a factor in your choice of a mortgage. If you plan to stay in your home for more than a few years, a fixed rate mortgage offers the stability of fixed principle and interest payments, and is fully amortized. This means that you are paying down your mortgage balance with each monthly payment. Reasons to consider hybrid, adjustable rate, or interest only mortgages can include:
  • Knowing you will be selling your home within a few years
  • Buying in an area where housing prices are prohibitive for first time buyers
  • Anticipating a significant increase in income within a few years
Don't be fearful of buying if you're ready to buy, and are confident that you're financially prepared for homeownership. Although peaks in home prices have been predicted since the 1940's, home prices have increased overall. If you're planning to stay in your home for more than a few years, you'll likely accumulate home equity, and should be able to ride out downturns in the housing market.

MSN Money Central

About the Author
Karen Lawson is a freelance writer with more than fifteen years of experience in mortgage banking. She holds an MA degree in English from the University of Nevada, Reno.

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