Is it Time to Buy Your Dream House?

Driving around your favorite neighborhood, you notice one of the houses you love recently placed on the market. This is the house you have been waiting for with a spacious kitchen, four bedrooms and fenced in backyard. With a growing family, is it time to buy your dream house in such a fluctuating housing market?

There are a number of factors to consider. If you are already living in a house that you must sell before buying a new one, the current buyer's market may or may not give you an advantage as you negotiate to buy a new home. Since you have a house to sell, that buyer will also benefit from a market that is full of eager sellers with fewer potential homebuyers. You will get more house for your money when you buy a new home, but you will get less money for your current house than you might want.

The current mortgage crisis, where subprime mortgages has led to many foreclosures, has made lenders more cautious about lending. If you have decent credit, a little money saved, and a reliable job, you can still obtain a good mortgage that just may get you and your family into your dream home.

It is important to be a responsible homebuyer and to understand that buying a new house is a large financial commitment. Before you get into mortgage payments that are beyond your means, do your homework and decide just how much you can afford before you sign on the dotted line.

One of the most important things to remember is to be realistic. A mortgage payment should not exceed more than one-third of your monthly gross income. If a mortgage payment goes beyond this figure, you will quickly find that you are not able to keep payments current.

Before you commit to a mortgage, take into consideration how much of your income is already paying for food, medical needs, gas, utilities, and other household expenses. Do not get into a mortgage just because you qualify for it. Consider all of your bills first to determine what you can really afford each month.

Another important factor to consider is your credit score. Lenders no longer lend money as readily as before. Generally lenders want to know that you will be able to afford your mortgage for at least several months, even if you lose your job. You might have to prove to a prospective lender that you have enough money in assets to cover your bills for a three month period before your loan will be approved.

To get the best mortgage lending rates, you will need a good credit score and a solid work history. People that pay their bills on time and keep their credit scores high are rewarded with the best mortgage rates that a lender can offer.

It is also wise to remember that just because you qualify for a large mortgage, this does not mean that you should borrow up to your limit. Rather than spending all of your income on your house and becoming indebted to your mortgage, you need to figure out what you can afford by budgeting for home repairs and updates, and utilities. The cost of keeping a new house is greater than the cost of the mortgage only.

Finding just the right house for you and your family is a difficult process and you should seek the services of a qualified real-estate agent. You can go with an agent who has an abundance of experience and knows the business well, or with an agent who is new and eager to find you the best deal they can. Either way, finding an agent that works well with your style will enable you to find the right home and negotiate the buying price when you are ready to make an offer.