9-24 If you are not investing in Real Estate, you are either Crazy or Broke :: The Construction Management Pro

9-24 If you are not investing in Real Estate, you are either Crazy or Broke

I posted that title about 9 months ago in my blog (www.thecmpro.com).  Since then the real estate market for existing homes has soften after the expiration of the First Time Home buyers Tax Credit. New Home construction is at a crawl, and the number of foreclosures is up over last month (down from a year ago though). However, if you bought since then you did not make a mistake if you intended to hold onto your property for the next three to five or years, giving the market a chance to recover fully.

It has been reported that Camden County, NJ has almost twice the inventory on the market now compared to 2005; however the number of “Closed” sales is off by 60%! Realtor’s are saying that their phones are not ringing for homes in any price range. With interest rates remaining low, this is what is called a Buyer’s Market. The bottom line is that this is a great time to invest in real Estate. You can still get hurt in this market if you don’t buy right and do your homework. Not every property for sale makes economic sense.

If you are thinking about buying a home, here’s are some things you can do to get prepared for home ownership.  Ready to make the homeownership plunge? Here’s how to get started:

  • Think about your budget. Create a budget with your new house payment included and try it out for a few months.  This will help you decide how much home you can comfortably afford. Typically, your monthly mortgage payment should be no more than 28% of your gross income. Bank the difference and not only will you see what paying a mortgage will be like, but you’ll save some extra cash too!

  • Pay off debt. The less debt you have before purchasing a home, the better. Lenders won’t usually allow your monthly debt payments– such as credit card bills, student loans and auto loans – and your mortgage payment to be more than 40% of your income. Plus, your mortgage interest rate will be based on your credit score. If you pay off some debts (but keep the account open), your score will likely rise.

  • Save for a down payment. 100% financing is almost impossible to get.  Saving for a down payment will allow you to qualify for a better interest rates.

  • Get pre-approved for a mortgage. Once your finances are in order, go to where you bank. There are many new programs available as a result of the recent Financial Reform legislation.

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