For many different reasons, most people are eyeing the real estate market right now for potential 2010 purchase. Some people simply want to move their family up to a larger home with less cost, while others are considering going into business flipping houses or taking on additional rental properties.
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It's true that prices are low right now, but you still have to seriously question whether it is the right time to take on this type of investment for you personally. One thing is for certain, there are guaranteed to be big chances in the real estate market in 2010.
On one hand, this is the perfect time to make a purchase since the value and selling price of homes is set to rise in the future. This means you can buy a new home for your family without its value dropping a short while later. This also means you can pick up a cheap rental house and make higher profits in time, or buy cheap prices to flip for substantial profits.
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.
Adjustable rate mortgages have also been a huge factor in the mortgage crisis, and many families are guaranteed to be forced out of their homes as more of those loans reset this coming year. When an ARM resets it can easily double the mortgage payment on the loan, which will make it unaffordable for many homeowners.
Another consideration is the expiration of a critical federal program in March. This was a program to help homeowners that allowed the government to purchase debt and mortgage backed securities from Fannie Mae and Freddie Mac. It has kept mortgage rates lower, but when it expires you can expect to see mortgage rates rise back up. Rates could go from 4.88% to 6% easily.
The Department of Housing and Urban Development (HUD) is also considering some other big changes for the real estate market in the upcoming year which might make securing real estate more difficult in the future. For instance, the required credit score could be much higher, you may be required to put down a substantially larger down payment, and insurance premiums could skyrocket.
The government is currently offering a tax break to get more buyers into the market. If a buyer purchases their first home by the end of June they will qualify for tax breaks of up to $8,000. If a homeowner purchases a second property, they will be entitled to a tax credit of up to $6500. While this may be most tempting for new homeowners, you should be prepared to make sure you can still afford a mortgage and have a steady source of income.
There may be other changes that come upon us in 2010, so if you are planning on entering the real estate market make sure you remain financially secure and will not stumble upon hard times like so many others. This can be an exciting time to make a purchase, but you want to make sure you can handle whatever happens over the next year or two.
About the Author
Karen Lissack has been reporting about real estate and home related topics for close to 15 years. She is proficient in any aspect in real estate from buying to selling, even investing. She is fully informed about chapel hill real estate and has helped people find the best chapel hill homes in the market.
by: Karen Lissack - Total views: 6 - Date: Sun, 7 Feb 2010
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