In spite of the state of the housing industry and the state of the economy, which may be getting better but has not yet balanced out completely, it is entirely possible to buy a house right now.  As we saw in the last post, you simply need to be smart about it.  One way to do that is by saving.  You need to start saving even before you have picked out your dream house.  Why?  I have three words for you: the down payment.

The more you can save up for your down payment, the better.  The real estate market and the lending industry are in as dire straits as everything else.  It is harder than ever to get approved for a loan.  One thing is for certain, however: the bigger your down payment, the better.  You also need to start thinking about the bank you intend to use.  If you are interested in a few, then make it a top priority to see what their individual requirements are.  You also need to remember how important it is to choose a house based on your budget.  Your needs and wants are important, of course, but you need to do all that you can to find a house that you like which you can also afford.

There is no question that the housing industry is in a pretty sorry state right now.  No one has the money to buy a home, and thus people who are selling their homes often find that they remain on the market for months, if not years, at a time.  That also means that the prices for houses currently on the market tend to fall quite drastically – and you might be in a position to take advantage of that.  However, you need to keep in mind that the rules are changing when it comes to qualifying for a loan.

The first thing you need to be concerned about is an appraisal.  You need to make absolutely certain that any property you are thinking about buying gets proper appraised.  That way, you will have a more accurate idea about what the home’s true market value is.  You will also be able to pick out any discrepancies told by the person selling the house.  Banks also appraise the homes they have.  They like house to appraise at a value equal to or greater than the amount of the loan a buyer is requesting.  That way, the risk of default lowers significantly.