By Kim Olson
Home prices have been moving in one direction in most areas of the U.S. and that isn’t comforting homeowners. It’s a fact that most areas of the nation 
are seeing more home sales but only because prices have come down so much because of foreclosures, and other bank-assisted sales.
What can prospective homebuyers do to differentiate fact from fiction when it comes to buying their dream home? It’s an accepted fact that in most of the country home prices are expected to continue to decline over the next year, with the exception of the areas that are experiencing job growth.
Mortgage rates should remain low, fairly stagnant or may rise slightly towards the end of the year. If you’re in the market for a home, you will want to start saving. Expect to pay more in down payment and loan costs, which are only anticipated to rise with the new Dodd-Frank financial reform act being implemented.
It’s a buyers market and you’ll find very good prices on homes for sale, but in today’s market lenders are not going to approve you for a home mortgage without fairly stringent requirements.
You’re going to have to document your income and assets carefully, and your lender may expect you to pay more for your down payment. Some are asking for 20%, even approaching 30% of the purchase price of a home.
Although condominiums have always been a good choice for homeowners who don’t want to deal with property upkeep and maintenance, they’re going to be more difficult to buy in 2011. Lenders don’t just look at your finances when buying a condo they also examine the financial health record of the condos’ homeowners’ association.
No more than 15% of an HOA’s (homeowners’ association) members can be 30 days or more behind on their dues. Conventional loans also require that at least 25% of the units are owner-occupied, not rented. The difficulties with obtaining a mortgage for a condo are resulting in many buyers opting for a single family home instead, and that’s adding to the problem with condominium prices in many areas continuing to decline.
If you want to improve your chances of being approved for a mortgage you might want to take the conservative route and know how much you can afford for your mortgage, and be prepared to ask for that amount, or less.
It’s a fact it’s a buyers market, and prices are generally going to stay low for the foreseeable future. As long as you know what you’re doing timing is on your side and buying your first home today could be like a work of fiction.