You may have heard from friends and family that now more than ever is the best time to purchase a home. The high foreclosure rates and home prices finally dropping seems to be an indication of this. This is not necessarily the case and it is not entirely true. The statement that people say it is a good time to buy depends entirely on where you currently are looking. To analyze this, you must look at how much the median home price is in the area you are looking and also the cost of rent. Look at how much the home costs and if it is 15 times the cost for a year’s worth of rent, then you should rent. In order to get a mortgage for the home of your dreams, you will have to get a free credit report and check for any errors.
For example, New York is a great place to rent and it is too expensive to buy. If you really want to buy and are flexible in the location, some good prices for homes are in Fresno, California and in Phoenix, Arizona. The reason why these places are so much cheaper is because they were hit by foreclosures. As a rule of thumb, of the area has many foreclosures, you will be sure to find houses for cheap. Think about the families who have foreclosures recently and they are renting now which drives up the rent cost. Because of the damage done by foreclosures, a hurt credit score will have a difficult time for banks to lend them money.
San Francisco is one of the places where it is encouraged to rent because of how much it costs to buy there. People who view the home as an investment will have a harder time, because they don’t know that it’s a home you live in. It’s hard to know without a crystal ball, but if you know you are staying in that city for under 5 years, then just rent because it is less expensive. In terms of planning, take the time to clean up your credit score so that when it does come time to either rent of buy, you won’t have trouble with the landlord or bank about getting a loan.
Let me know your thoughts about whether or not you should rent or buy.
