Great Deals For Home Buyers

With low home prices and ultra-low interest rates, the housing market is offering "perhaps the best deals of a generation," notes a recent article by Bloomberg Businessweek.

Since the housing boom of 2006, home prices have fallen about 31 percent. Also, mortgage rates have been hovering at record lows for the past few weeks (4 percent range or even lower on 30-year fixed-rate mortgages, according to Freddie Mac's mortgage market survey).

"It's hard to see the possibility of losing on a home purchase right now, with these mortgage rates," says economist Dean Baker. "Prices may go lower, but not by much."

The article notes the following scenario: Buying a $300,000 home with a 4 percent mortgage rate and a 20 percent down payment would mean a $1,145 monthly payment. The Mortgage Bankers Association recently predicted that home prices may fall another 3.5 percent by mid-2012 but mortgage rates will increase by a half-point. So for that same loan under that scenario, a home would sell for $289,000 while the monthly mortgage bill would be $1,171 -- only a $26 difference.

If you are renting and thinking to wait for home prices to drop, let me tell you this: You wait 6 months and pay $ 1000 rent, you are putting $ 6,000 in your landlord pocket, that if you bought a home you have that money going towards your investment, and at the end of the year you will receive an statement from your lender informing you the amount of interest paid onthe loan that you will write off from your taxes.

You have enjoyed your home, started your investment, got a low interest rate in the 4's and have a write off, what could be better than that? Waiting for home prices to drop is not be wisest choice.

Take action, buy a house now that home prices and interest rate are very affordable. Remember fha loan for first time home buyers down payment is 3.5% and there is a conventional loan with 5% down. It is easy to fulfill the fha requirements to get an fha loan, look for an fha approved lender