If you are looking for a larger home for your growing family or are interested in purchasing real estate for business purposes, you are probably thinking about making a purchase or two in the upcoming year. This brings to question whether the current economic storm is perfect for real estate investments, or not.
This is an exciting time in the real estate market, but there is also a lot of upheaval, confusion along with the low prices. There will definitely be some changes in the market in 2010, so seriously ponder whether buying real estate now is the right move for you.
The first thing to understand is that the prices and values of homes are set to go up in the future. This means if you purchase a house cheap right now you could expect to turn it around for a nice profit in the future. This also means you can pick up property for your personal use without facing a dropping value a short while after purchase.
With the economy still unstable, many more homeowners will find themselves unable to pay their mortgages. It is said that 1 out of every 4 homeowners owe more on their mortgage than their home is worth. With many people losing their jobs, their mortgages will go unpaid and their homes will be lost.
With hundreds of billions of dollars in adjustable rate mortgages set to recast next year, the new payments can end up being more than twice what their original monthly payments have been. This also will see more people losing their homes due to nonpayment of their mortgages.
In March, 2010 we will also see the expiration of a federal program which has kept mortgage rates rather low. This program allowed the federal government to buy mortgage backed securities and debt from Fannie Mae and Freddie Mac, but when it expires you can expect to see mortgage rates on the rise. This could mean a hike from 4% up to 6% before the end of the year.
Also consider that purchasing a home could be a lot harder in the future since HUD is considering a variety of changes in the coming year. You could find that your credit score is no longer high enough to get a mortgage loan. The down payment required to secure a home could double. Also, expect to see much higher insurance rates for new loans in the future.
Finally, consider the value of the tax cuts currently being offered by the federal government. If you purchase your first home (the rules are lax on what “first” means) before July, you could receive up to $8,000 in tax breaks. If you decide to purchase a second property, you could receive up to $6,500 in tax breaks. Of course, you want to make sure you can afford your payments long term and not get sucked in by the temptation of this offer.
It is important to keep all of this in mind if you do purchase real estate in the upcoming year, but also be prepared for whatever may happen with the economy. Make sure that you are financially secure and that you can handle whatever changes may be coming in the next year as the economy fits to normalize once again.
Karen Lissack has been reporting about real estate and home related topics for close to a decade and a half. She will help you with information in various aspects in real estate from buying to selling, even investing. She is fully informed about chapel hill real estate and has aided people in finding the best chapel hill homes the market can offer.
Incoming search terms for the article:
- best places to invest in florida
- investing in florida real estate 2010
- best cities to invest in real estate 2010
- best areas to invest in florida
- should i invest in freddie mac 2010
- best cities to invest in real estate
- best place to invest in real estate in usa
- best places to invest in real estate 2010
- best place to invest in florida 2010
- best place to invest in real estate
Leave a comment