While it has been exceptionally tough for the last few years, many people have been working hard to save as much money as possible to get on the property ladder. This is despite all the foreclosures in the news. With so many sad stories of entire families losing everything in the economic downturn, lots of us have still had a house buy on our minds.

The time may be now to consider making that leap into home ownership. Interest rates are still quite low, but signs are showing they may soon return to pre-recession levels. Mortgage lenders are more careful now too. You will have to show you can easily afford repayments and that you are better off buying than renting. Good spending and saving records from the last six months should be available as they may be needed to support your application.

Historically, banks were keen to see around 10% as a deposit in your savings account. Nowadays, people are getting turned away despite showing 20%. The trick is to show a conservative spending pattern in your bank accounts. If you frequently use overdrafts or have large debts on your credit cards or loans, you may struggle to get a good mortgage. The next thing you need to consider is where to buy.

By never borrowing beyond your means, you should easily be able to afford to repay a mortgage. We should all be just as careful with where we invest that money. While things in Colorado housing are looking up, other housing markets have yet to recover. We can’t always pick which state we live in, but we can check the estimated value of homes and the pricing trends online.

If you can see yourself becoming a homeowner soon, it may be worth ensuring you buy a property with affordability in mind. If something happens and you lose your job, you would want to be sure you could carry on. You may be paying the mortgage for a good number of months before having to find alternative employment. Equally, you may want to check the affordability against a state average wage figure if you are currently earning well, just in case you need to take a dip in earnings.

It could be a good time to buy now if you have been and will be careful in your financial situation. The more people who buy, the stronger the market will become and the higher the value of your home. Taking care to pick a desirable home with scope for you to improve its value further should stand you in good stead. Any gizmos and gadgets, or trendy decor should not cloud your judgment on the value of a property. You can always install those things in a cheaper property.

Talk to a good mortgage advisor about the right product for your situation. If you anticipate your situation may change in the next three years, be honest and ask for his advice with that in mind. Starting a family or a new job could affect your affordability, and you do not want to join the hoards of those with foreclosures.

Image Credit: Thanks to Flickr for this image

How To Know If Now Is The Right Time For You To Buy A House

Elisa Adams

A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.

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