Mortgage Fearbuster 25

Posted by  on Oct 18, 2010
 

 

Q: I could really use some outside advice. With mortgage rates so low, and home prices in our area remaining affordable (much more so than a few years ago!) my husband and I would like to move up, but I'm nervous about possible layoffs. My husband thinks we should buy now as rates may increase soon, and so could home values.

A: Pay attention to your gut feelings; if your employer has indicated a possibility of layoffs, or salary reductions, this may not be the best time to buy a more expensive home and take on a larger mortgage. That said, if you and your husband can support the payments if your fears come true, low mortgage rates and home prices could combine to provide extra buying power.

Q: I recently received a small inheritance from my grandfather. Everyone is telling me to buy a home with the money, but I'm not finished with college yet, and am not sure where my career will lead. Should I buy right away, or put the money away for when I'm more certain about where I want to live?

A: Don't buy a home right away unless you plan to live in it for several years. Home prices and real estate markets aren't stable in many areas, and there is no guarantee that any home you buy will increase in value. I wold suggest putting your money in a deposit account until you're ready to buy a home. Avoid making investments that could reduce your inheritance; you'll have full advantage of your inheritance funds when you're ready to buy.

 

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