New Home Loan: A Buyer's Market?

By Gabriel Traverso
CMR Columnist

It's hard to deny that now is an excellent time to be shopping for a new home. Current mortgage rates are still at all-time lows, inventories are up, and many sellers are highly motivated.

In recent years the housing market and mortgage industry have seen some truly interesting changes. Buyers were flooding the market and driving prices up almost in a mad frenzy. Now the landscape has changed and the upper hand rests with buyers.

Sellers No Longer Hold the Cards

No matter what your take is on the recent "bubble" in the real estate market, reality is that buyers have always set the price in any transaction. If the price is too high no one will buy. Could this be why we're seeing homes sitting on the market for so long? Or why agents are playing with days on market to make a home appear to have sold in 34 days when it actually took 195 days, as Shannon Behnken reported in the Tampa Tribune?

Know What You Can Spend

One of the best moves you can make when buying a home is to get pre-qualified for your loan. Find out exactly how much mortgage you can truly afford and only then begin your hunt. This will save you time and, in some cases, a little heartache, too. It also draws a line in the sand--you know exactly where your ceiling is and you have a number to play with.

A new home is a major investment the loan can take 30 years to pay off. Mortgage rates are still very good, so take advantage of the position you have as the buyer and work with your real estate agent to try and get the best deal you can. The asking price is, after all, only the asking price--you may find some sellers will accept less.

About the Author
Gabriel Traverso is a freelance writer, independent musician, and artist. He resides in Reno, NV.

© 2007 CMR. All rights reserved.