According to the National Association of Realtors over 50% of homes purchased in March were by first-time home buyers. This is great for the ex-renters and our economy to get us back on the right track. Overall housing inventory dropped by 1.6% by the end of March creating an upswing in sales as buyers are starting to jump off the fence. This in large part is due to the fact that home prices have dropped over 12% from this time last year. Rates are very low and there is plenty of money even if you have less than perfect credit. As of this posting a 30 year FHA fixed loan with a 625 credit score is running around 4.875%. However, if this is your first home, you might want to consider a couple of things before you sign a contract.
- Are you ready to take on the responsibility?
- After your total closing costs do you have a couple of months expenses in reserves?
- How stable is your job?
- Have you considered extra homeowner expenses?
- If gas prices rise will it be a budget buster?
- Do you have extra money to pay down your credit card balances?
Remember even though home prices might be low do you have the reserves to pay for maintenance. Make sure you get a home inspection and a home warranty so that you know what you are getting into. The $8,000 tax credit should kept in reserve to help cover expenses that may arise. Be a Boy Scout and always be prepared.
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