Challenges facing first time home buyers

Owning a home has always been a goal of pretty much everyone at one point or another. By owning your own home you are able to save time and money that is usually being paid for rent. Unfortunately, with the current downward trend in the economy, people are having a difficult time saving up enough money for their future home. Instead, their incomes are going to monthly bills, and/or interest rates dictated by various lending institutions. And to make matters worse, some lending institutions are increasing their interest rates from a minimum to a maximum which can increase payments, or the duration of the loan. Although renting still remains a viable option to many in order to have a roof over their heads, it's still not a favorable one. It's always hard to pay an amount equal to a mortgage payment which feels like a dead end since the money is going to the property owner, and not the tenant.

Even if the state of the economy has significantly decreased the amount of homes being sold, many lenders have raised the down payment required for a mortgage today vs. several years ago. Studies and surveys confirmed by The Council of Mortgage Lenders show that the number of first time buyers in the years of 2008 and 2009 decreased significantly. Additionally, not only are the buyers affected, but the sellers themselves. It turns into a vicious circle since the number of people who are able to afford a home no longer make it a top priority. So with fewer buyers, homes are therefore take longer to sale. This unfortunately leads to another dilemma, and that is the possibility of sellers having to lower their price in order to attract buyers.

With that being said, it's wise to tread lightly when making that first purchase. Do a conservative budget checking it twice, and get pre-approved. Be sure to weigh your options carefully doing your homework ahead of time, and try not to get caught up in the heat of the moment. Remember, if you bite off more than you can chew you could end up like some of the less fortunate. The goal here is to keep your home, and make through our current economy until things pick up again so you can appreciate that appreciation...

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