HOUSING AND MORTGAGE MARKET – IS IT THE RIGHT TIME TO BUY? – the Iowa Mortgage Guy way!

Hello from Cedar Rapids, Iowa. Welcome to the IowaMortgageGuy Blog! Glad to have you as a guest and hope to see you back again soon. Hope you find the information useful and informative.

Selecting the right time or even whether to purchase a home and do a mortgage is critical. Therefore, it's important to understand what goes into deciding that. When considering purchasing a home or even doing a mortgage there are several things the Iowa Mortgage Guy likes his clients to consider and go prepared into the transaction.

THE HOUSING MARKET THESE DAYS...

You may have heard news that the housing market is in turmoil, and that home prices have been either stalling or falling, in many areas. You may have even heard that it is tougher to get home financing or a mortgage for that home too. So does this mean it's too late to buy a house?

Before you write another rent check, or put off the opportunity to buy a property, consider the following things you need to know when it comes to homeownership.

HOMEOWNERSHIP IS A LONG-TERM INVESTMENT

Homeownership is still one of the best long-term investments you can make because homeownership has proven to be a critical contributor of financial well-being for families for long time. While residential real estate did especially well between 1998 and 2005, don't just consider that time frame alone. Actually, housing has been making consistently solid gains since the 1950s. It's simple - homeownership generates wealth that renting your home does not provide or only provides to the person that owns that home.

THE IRS ADVANTAGES TO HOMEOWNERS

The federal government provides tax breaks for homeowners - from allowing you to deduct your mortgage interest, property taxes and even possibly your mortgage insurance to exempting capital gains taxes on your primary residence within limits (be sure to check with a tax professional to see how these may apply to you). In some cases, you may find that your after-tax mortgage payment is comparable to, and perhaps lower than, your current rent payment! In addition, the Housing and Economic Recovery Act of 2008 provides some added stimulus to those who have not owned a home in the last 3 years that have bought between April 2008 and June 30, 2009. These incentives are significant.

HOME PRICES HAVE RISEN HISTORICALLY

During the past year - 2007, home prices across the country did trend upward (even if ever so slightly), according to government statistics. Although it may have been the lowest four-quarter change since 1990, it may well be the strongest performance we'll see for the next few quarters as we work our way through a challenging 2008. But the expected downturn shouldn't overshadow the terrific record that residential real estate has built up over the years. We still have a string of 129 consecutive quarters of year-over-year growth in national home prices, covering the data's 32-year history. If you plan to remain in your home for a least a few years, history is on your side.

THE NATIONAL MARKET DOES NOT REFLECT LOCAL PROPERTY PRICES

The media likes to refer to a "nationwide housing slump". Don't be misled. Real estate isn't national, it's local! The only market you need to be concerned about is the market you intend to buy or own real estate. Some areas throughout the country are indeed struggling. On a state-by-state basis, seven states recorded price declines but at the same time, nine states posted increases. When considering a purchase in your area, ask yourself about prospects for local job growth and rely on your real estate agent, who can tell you a lot more than just listing prices. Ask about days on market, the local housing inventory, and selling prices to get a clear picture of your current local market. Don't let headlines in the media scare you.

PURCHASE OPPORTUNITIES HAVE IMPROVED

In most of the country, the number of homes on the market has risen steadily is significant, making this largely a buyers' market. Sellers are more willing to make concessions on price or even pay part of the closing costs. Mortgage rates remain low by historic standards.

DON'T HAVE TO WORRY ABOUT TIMING THE MARKET.

Ideally, you would purchase a home when the price is at its lowest, and see it start to appreciate right away. It's nice to have a dream, but don't let that keep you from getting into the market. Remember it's not timing the market...it's time in the market. If you're making a long-term purchase, you're usually better served just getting in.

HOME FINANCING OPTIONS STILL AVAILABLE.

Even thought mortgage financing has tightened or become stricter, there is still a wide array of mortgage products out there, filling various needs for many borrowers in various situations. Be sure you understand what you're getting and get it explained to you well. Will the rate change? If so, how soon? How high could it go? Can you handle bigger monthly mortgage payments? What are the mortgage insurance premiums or down payment requirements today? Are you paying down the loans outstanding balance? These are just some of the questions you need to consider. The mortgage that's right for you depends on your situation and your preferences, and some financing options available to you may harm, not help, your financial security. That's why it's critical to work with a lender who takes the time to understand your financial circumstances and preferences, and helps you understand your choices. Again, the main point is: Homeownership is an important way to move ahead financially, and waiting for the current concerns to disappear could cost you. Don't simply assume that this is a bad time to buy real estate. Go beyond the national news headlines, and make yours a well-informed decision.

The bottom line is that you must have some sort of idea of what you are requesting with respect to your home, financial objectives, goals and wealth strategies and discuss them with a professional mortgage originator and make the educated choices that are best suited to YOUR goals and objectives.

Putting my interest in yours,

Jeff Harding