Dealhunter's Guide To The House Hunting

The solution isn't as simple as it once was- when property investing was considered a definite 'win'. There are both reasons for buying a house and reasons against it - and the decision is one that should be weighed against several factors.

Halifax House Price Index reports have seen an annual drop in house prices by some 2.1% across the UK. This is not a sign of a good investment for the most part! Other reports show the sales of homes could fall by 20% in 2008, another warning sign that homes may not be the strongest investment at the moment.

On the other hand - this is what people consider a buyer's market. The prices of homes are more affordable than than they were a year ago. Interest rates have fallen, and because less people are buying there are more homes to choose from. The concern is that it will take too long for the market to see an up-swing; and that real estate investors will lose money while they wait for the market to head back uphill.

Should You Buy?

If you are a two-income earning family, with credit scores of 680 or better, and have some money in the bank (or other assets); you would want to take advantage of the 'buyer's market' and buy a home. Good news for qualified buyers - due to the reduced number of people looking to buy homes now, home sellers of higher-end properties are having to drop their selling prices. This means buyers can look at homes that are a bit outside what they normally would be able to afford.

It's important to keep in mind that you will not want to take on more house than you can reasonably afford, despite the potential to get more house for your money. Take the time to run the numbers to figure out what your budget can afford - don't just buy the most house you can get for the money the mortgage lender decides they will lend you. Just because you can borrow it, doesn't mean you can afford the payment!

If you don't have a downpayment of 20% saved, and your credit score is on the low side, be prepared to pay higher interest rates. It may be in your best interest to avoid buying a house until you've saved more towards a downpayment and done some credit score repair. You can often raise your credit score 15-25 points in under a year; so it may be worth it to put things off for a little longer while you get yourself financially ready.

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