The Effects of Home Buying in a Depressed Economy
The current state of the economy leaves many people frustrated and unsure whether to invest the time and money into buying a new home. Even though mortgage rates are at an all time low, there are things to consider before deciding to invest in a home mortgage. As a potential homeowner you must proceed with caution before you make a decision that may potentially over-extend your budget. Many people make the mistake of thinking the economy is going to improve and base their financial decisions on that premise. What you really need to do is look at home much you can afford each month while giving consideration to the settlement you will receive after getting divorced.
The current housing market is the most affordable it has been since 1970 according to the Association of Realtors. With both the price of homes and interest rates so low potential home-buyers are fooled into thinking the purchase of a home is quite attractive. The problem is that housing prices are continuing to fall; the house you buy today may not be worth the same price a few years from now. With sellers having to wait so long to sell their homes, buyers have a large selection of homes from which to choose. This abundance of homes may also lead to even further drops in the price of homes. If you are only going to live in the home a short time after getting divorced, it may be more financially sound to rent rather than buy. Renting your home will prevent you from being stuck in a house you may not be able to sell or on which you owe more than the appraised value. No matter what decision you make it is essential to make sure you have money in savings to cover the loss of a job, a serious health problem or a decrease in your income.
In spite of the low interest rates that are currently in effect, lenders have stricter qualifications than they did in the past. You need to have good credit, proof of income and a substantial down payment to qualify for the lower interest rates—even then you may not qualify for a mortgage at all. Unfortunately there is never a perfect time to buy a new home, so you need to weigh the advantages and disadvantages that exist on both sides of the coin. Make the right decision by researching your individual financial condition as well as the needs of your family before investing in a new home. Making sure you have a contingency fund in case of an emergency is the first step toward your continued financial security and will ensure your home purchase will be more enjoyable and less stressful.
Keep in mind during the process of getting divorced that none of the divorce lawyers possesses the expertise you need to make a decision concerning a home purchase. You need to consult an expert in the area of both real estate and divorce law because only these professional can provide the information you need to make the right decision concerning the purchase of a new home.
