My hubby and I had some serious financial problems a few years ago and are now re-building. We had bought a house and shirtly after I was pregnant and laid-off and then he was laid off.
We are currently renting.
We make excellent money and are very interested in being homeowners again, but the housing market has been a little scary these past few years (for buyers, not sellers).
I know no one has a crystal ball, but is the market going to normalize? If so, are they expecting it to happen this market, or next?
What should we be looking for, besides the obvious (prices going down)? I am leery of bankers and loans people because we trusted a little too much last time
You don’t really need an econ lesson. What you need is to know how to manage your finances and cash flows. You also need to realize how much money you can afford, and what exactly is “affordable.” I’m not saying that you’re terrible with your money, but you need a plan in place against a layoff, so that circumstances don’t repeat themselves.
Once all that is in place, and you know what I like to call your “magic number” (the amount of loan you can actually afford to take out), then you start looking at houses. When you have a list narrowed down, start to look at financing and interest rates so that you know what wiggle room you have.
I’ve been told that a good rule of thumb to live by is to purchase a place using a mortgage that is at most three times your salary (base, I guess).
Others will talk about down payments and market trends, but if you know you’re going to stay in the house for at least 7 years (this isn’t hard and fast, just a number I feel comfortable with), you can ignore some of those variables and just concentrate on price and resaleability. The longer you know that you’re going to stay in a house, the more you ride out price drops, depressions, bubbles, etc.