BySuzanne Glasser
There are many factors to review when it comes to finances with a big one being the real estate market. What many would consider to be the opportunity of a lifetime, others are now saying there are a number of years to go until the real estate market bottoms out. So which way should you lean and how will it affect your financial goals?
Affordability and Lending
With interest rates on a 30-year mortgage at the lowest levels practically ever, home ownership has theoretically never been more affordable. However, what many are failing to take into consideration if the fact that banks and other lending institutions have now pulled the purse strings so tightly that it is growing harder and harder to secure the financing you may need for a new home purchase.
Dipping into Savings
Because banks are now so strict with their lending policies, those who are seeking to buy a home are forced to dip even deeper into their savings accounts in order to come up with the money needed for a down payment. Gone are the days where you could simply sign a few pieces of paper and declare you would pay back the loan on a home. Now the banks want to be fully protected. This means a likely decrease in your savings if you are in the market for a new home.
Prices and Savings
For many people, their single biggest investment is their home. That means that should you choose to buy a home you will likely count on the price to go up after time has passed making you a nice profit in the process. However, this doesn't mean that you should simply buy a home and expect it to go up and up and eventually become your nest egg. While the real estate you acquire can be a nice addition to your overall finances some day, they should not be relied on to be your entire future finances.
What's Best for You?
No matter what the real estate market is doing it all comes down to figuring out what's best for you and your particular situation. It may be that you can in fact buy a home and still be able to achieve the American Dream of financial independence. In fact, home ownership might just help you get there bit quicker. However, without looking closely at all the financial impacts buying a home means for you, you might inadvertently make what could be the biggest mistake of your investing life. So, careful consideration must be taken.
Suzanne Glasser is a freelance finance writer specializing in wealth building topics. Click for more information on ISMAmerica Reviews or visit http://www.ismamerica.com.
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