Many people are getting out of their house for some reason or another. Either because funds are getting tight or people are downsizing. More recently we have seen an increase for reason of foreclosure. Now that might be the best time to buy a home. The recession is hurting around the US, but that isn't a bad thing for a poised buyer looking for a great investment.
As people are running out of their houses, like Noah from the flood, the banks are willing to bargain more so they loose less. In troublesome financial times, home ownership could become more of a necessity for potential homebuyers.
Recession Investing is Top Priority
No matter where you are from, you can tell that the prices of houses are falling dramatically. People who could not afford to buy 6 months ago are now grabbing up the deals of their lives. Five-digit rice reductions could mean a tremendous decrease in monthly mortgage payments. But with prices dropping in excess of $100,000.00, that could mean a large return on your investment, which makes it a great time to purchase a home right now.
As the housing market begins to stabilize at a much lower pace than in previous years, your investment becomes more of a priority. With a purchase of a low dollar figure now, when the market starts to recover, there is going to be a huge jump in home prices and appraisal values in just a few years down the road.
Interest Rates
With the slump in the housing market, the interest rates have gone nowhere else but down. Lingering around the five percent mark for a 30-year fixed loan, the rates are down by almost 70 percent from just 18 months ago when they were around 6.8%. That is a huge jump when talking about long-term payments.
On a $500,000 loan with 20% down:
At 6.8% (2008 rates) your monthly payments are around $2,607.
At 5.0% (current rates) you are paying $2,147 a month.
That is a savings of $460 a month.
Multiply that by 30 years and you are saving $165,000 or about 25% of the original value. So the down payment practically pays for itself.
All it takes is a quick look at the numbers to see what an opportunity you could be passing up if you are not recession investing right now. Low interest rates are begging for houses to be snatched off of the market. Did you look for your dream home yet?
Buyer's Market
New construction is slowing down due to missing funding. Older neighborhoods are winding up as bank-owned communities. This is a buyer's market, which is another great reason that investing in property during a recession is a wise move. To top off the low interest rates, a $500,000.00 home was originally listed at $603,000.00 by the bank, which was, honestly, tired of losing money on it each month.
The bank now has one less property to worry about and you just saved a boatload of money, a win-win situation. Short sales can generally be listed at a 20% loss to the bank, but lately they have been bordering on the 30-40% loss range, making your investment property that much more affordable.
If you hold on to that property for 10 years, on the safe side, while the economy and housing market return to a previously normal state, with the interest rate and the reduced cost, you would have now gained a substantial dollar amount, breaking more than 50% of the value of the house.
That New House Smell
While the money is great, you should never underestimate the power of the new house feeling. To finally realize that you got such a great deal on a place you absolutely fell in love with is like none other. The joyful feeling that comes with home ownership - that "established" aura that radiates from within - is, amazingly, a great cure for the economic blues that is going around today.
Recession investing should be the top priority you have if you are thinking about buying a house. With the interest rates at an all time low and both, sellers and banks willing to haggle, there is no reason you should not already be three steps closer to being a recession investor.
Use the current market and economy to your advantage and grab up that high rate of return you are looking for or that dream home you have always wanted. Speak with your local Realtor to find out your current recession investment opportunities.
As people are running out of their houses, like Noah from the flood, the banks are willing to bargain more so they loose less. In troublesome financial times, home ownership could become more of a necessity for potential homebuyers.
Recession Investing is Top Priority
No matter where you are from, you can tell that the prices of houses are falling dramatically. People who could not afford to buy 6 months ago are now grabbing up the deals of their lives. Five-digit rice reductions could mean a tremendous decrease in monthly mortgage payments. But with prices dropping in excess of $100,000.00, that could mean a large return on your investment, which makes it a great time to purchase a home right now.
As the housing market begins to stabilize at a much lower pace than in previous years, your investment becomes more of a priority. With a purchase of a low dollar figure now, when the market starts to recover, there is going to be a huge jump in home prices and appraisal values in just a few years down the road.
Interest Rates
With the slump in the housing market, the interest rates have gone nowhere else but down. Lingering around the five percent mark for a 30-year fixed loan, the rates are down by almost 70 percent from just 18 months ago when they were around 6.8%. That is a huge jump when talking about long-term payments.
On a $500,000 loan with 20% down:
At 6.8% (2008 rates) your monthly payments are around $2,607.
At 5.0% (current rates) you are paying $2,147 a month.
That is a savings of $460 a month.
Multiply that by 30 years and you are saving $165,000 or about 25% of the original value. So the down payment practically pays for itself.
All it takes is a quick look at the numbers to see what an opportunity you could be passing up if you are not recession investing right now. Low interest rates are begging for houses to be snatched off of the market. Did you look for your dream home yet?
Buyer's Market
New construction is slowing down due to missing funding. Older neighborhoods are winding up as bank-owned communities. This is a buyer's market, which is another great reason that investing in property during a recession is a wise move. To top off the low interest rates, a $500,000.00 home was originally listed at $603,000.00 by the bank, which was, honestly, tired of losing money on it each month.
The bank now has one less property to worry about and you just saved a boatload of money, a win-win situation. Short sales can generally be listed at a 20% loss to the bank, but lately they have been bordering on the 30-40% loss range, making your investment property that much more affordable.
If you hold on to that property for 10 years, on the safe side, while the economy and housing market return to a previously normal state, with the interest rate and the reduced cost, you would have now gained a substantial dollar amount, breaking more than 50% of the value of the house.
That New House Smell
While the money is great, you should never underestimate the power of the new house feeling. To finally realize that you got such a great deal on a place you absolutely fell in love with is like none other. The joyful feeling that comes with home ownership - that "established" aura that radiates from within - is, amazingly, a great cure for the economic blues that is going around today.
Recession investing should be the top priority you have if you are thinking about buying a house. With the interest rates at an all time low and both, sellers and banks willing to haggle, there is no reason you should not already be three steps closer to being a recession investor.
Use the current market and economy to your advantage and grab up that high rate of return you are looking for or that dream home you have always wanted. Speak with your local Realtor to find out your current recession investment opportunities.
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