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Ahora es el Tiempo de Comprar un Hogar

Now's the Time to Buy a Home

By Warren Morrow

Your dream of owning your own home can become a reality in this economic climate.

Throughout the past few years, we have seen a weak United States economy especially due to the mortgage market. For many years, housing loans were easily available in the marketplace, which generated demand for more homes, creating more construction and higher prices for homes.

The artificial inflation of home prices was not sustainable, and the result was one in which many families with high mortgages, were not able to continue making their payments. This created a negative cycle in which home values fell rapidly and in which borrowers owed more than what their homes were worth. In this situation, some people defaulted on their payments without being able to sell their homes. Almost instantly, new construction halted, materials prices fell, companies failed, people lost their jobs, demand for homes disappeared, and in its place lenders were left in control of an immense housing inventory.

What does this mean for you? Simply put, it means that there are many houses in a market where the buyer has the advantage.

If you had the good fortune of avoiding falling victim to this mortgage market phenomenon, you have the advantage now if you are considering buying a home:

To start with, low demand means that home prices have fallen. If financial institutions took control of a house after someone foreclosed, it is almost certain that they will want to sell the home as quickly as possible. It does not help them to have a home in their possession, and they would prefer for someone to buy it and to start making the needed house payments.

Also, those who survived until now making high payments on homes that have decreased in value, are probably anxious to sell their homes to escape the burdensome responsibility.

At the same time, interest rates have fallen. As a factor of the economic recovery and the various stimuli that have been introduced by the U.S. federal government, interest rates are increasing again, but are still at some of the lowest levels ever seen. As in any situation where the supply exceeds the demand, the buyer has the advantage. Interest rates fell as part of efforts to create consumer confidence and to recover economic losses. It is still a good time to find attractive interest rates to obtain your home.

The lack of demand gives you options. It will be much easier now to find exactly the house that you want. There are so many houses for sale in the market that you have choices, and, with patience, you can be assured of finding the most attractive house at the most attractive rates. Just the fact that you have options will put you in a better position to negotiate.

Of course, demand is low in these times because there are many people suffering the effects of the recession. Because of this, lenders are tightening their qualifications for loans. Still, they are motivated to find well-qualified borrowers and if you are one of them, you are likely to receive a lot of attention.

Remember, that it was greed that caused this economic problem, so look for a modest home that fits your financial situation. Seek the advice of your trusted credit union, who can provide guidance related to how much home you can afford. Once you know the price ranges that fall within your monthly budget and are armed with a "pre-approval," you will be able to find that reasonably priced home and make a great purchase feeling certain that you will be able to afford it.

Published 5/31/10

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