Yes, the market is down and yes, many people are in trouble with their existing mortgages, but does that mean that the rest of us shouldn't make major purchases?
It seems that all we're hearing these days is how bad the housing market is. It seems that everywhere you turn, people are on the verge of foreclosure. The risk of losing jobs is a reality for many and the idea of even buying groceries is becoming stressful for many. People are losing money on their investments and many analysts fear that we are teetering very precariously on the verge of recession. The general feeling among Americans right now is to save, save, save.
This is the cold hard truth in our country today. Add to it that we're in an election year and it's no wonder that people are afraid to make major purchases. The thing is; not everyone is suffering. Just as not everyone is stuck in a mortgage that they can't get out of, not everyone's jobs are being threatened. This isn't to say that there isn't great big concern for those Americans who are suffering from financial crisis. There is always concern for families in crisis; the thing is that the rest of us aren't doing as much as we could to help the economy.
If we take a quick look at the crisis with the economy, we would see that a lot of the issues stem from the housing market. The retail sector is in trouble, especially those retailers that sell big ticket items. Car sales, furniture sales, even computer sales are down right now. So, why aren't more American's buying the expensive gifts for themselves that they were two years ago? Why aren't more people buying homes right now? And the stock market - where are all the investors going? Why are so many people who aren't threatened financially afraid of spending their money?
It doesn't take a genius to realize that right now is a bargain hunter's dream come true. If you have the money and security, now is the time to make that major purchase. Watch any TV channel for ten minutes and you'll see the car ads. Cash back, low interest, no down payments… You name it, it's there. So, why not now? Same thing with houses; the cost of housing is finally falling back to affordable. While sellers are suffering (let it be known that I have huge issues with a buyer forcing the price of a house down so far that it hurts, but that's another topic), buyers are finally in a position to purchase a nice home that they can really afford. This is a prime market and when you make a major purchase such as a home, you are helping to stimulate the economy. If all of us who don't own a home decided to buy a home, we might be able to help churn the sluggish waters.
Yes, but there's no financing available anymore, you're thinking. My credit's not fantastic and I don't have much of a down payment. Okay, right. That is tough and doesn't make for the easiest lending situation, but, if you look hard, the lending is still out there. You won't be able to get away with the sub-prime, interest only loans of yesterday, but that's actually a good thing. So, your interest may be a bit higher and your payment a little higher, but if you're smart and responsible, you can still get a loan with a payment you can afford. Now, make no mistake, if you have iffy credit, you're going to wind up with a higher rate, so you won't be paying pennies for your mortgage payment, but you'll have a fixed rate and if you give it a few years and make your payments well and on time, you can refinance if you want with a better rate. The thing is, loans are out there. It is possible to get a loan. The key is to do your homework. Talk to your bank, talk to a mortgage broker. Go through your finances so there are no surprises and know what to expect.
It's the same thing with cars and any other big ticket items. If your job's not at risk and you aren't already drowning in payments and you need it, then buy it! Consider buying brand new vehicles, because many are even offering cash back. That's more money for you to save, right now, basically for buying a car. That doesn't happen often and when it does, the offers are few and far between. Right now, almost all car companies have a cash back option. Waiting until later really won't pay off right now, because when the economy comes back it will come back big time and we'll be back to paying way too much for way too little and we'll call it the American Dream.
People have talked for years about their cars going “upside down” on them, or owing more than their car is worth, but many people had no idea that could happen with homes. Guess what - it can and has for many Americans, so right now is a really great time to buy, because home prices are down, which translates to not only a great deal for home buyers, but almost a guarantee that the value of your home will go up, not down.
We tend to forget that while it's great for the government to help stir the muddy waters of our economy, it's not their responsibility. Unfortunately, the government can't fix this. They can send as many rebate checks as they want (which will be greatly appreciated in our home), but it's not going to make a bit of difference if we don't spend the money we receive. Yes, it's important to save, so save some, but consider spending some, too.
Sure this sounds like an ad put out by some government agency in an effort to stimulate the economy, but it's not. This is just a little article by a fellow American who loves to spend money any time as long as it's available. In fact, it's almost as exciting as having lots of financial resources available in case of a crisis.
So, consider getting a more fuel efficient vehicle or putting a down payment on a new house in the near future. Don't jump into anything, but don't sit and wait, either. This is like having a huge coupon that you can cash in on again and again on the things we all need.
If you are in a financial crisis, my heart and thoughts go out to you and I hope that things will be better soon.
