GO
Loading...

Suze Orman changes homebuying advice

Now that we are seeing a rebound in the housing market, it is time for a new home buying strategy says Suze Orman. "Financial advice needs to change according to what is happening in the economy," she says.

In today's economy, with interest rates still low, relatively speaking, and home prices leveling out, Orman says potential homebuyers no longer need to make a down payment of 20 percent. "I'm fine if you can get a mortgage with 10 percent down," says Orman. In addition, she still maintains that:


•You get a 30- or 15-year fixed mortgage
•You qualify for a 4 percent to 4.5 percent interest rate
•Your mortgage payment, property tax, insurance and PMI (private mortgage insurance), is equal to or less than your current rent
•Your job is secure

These rules shouldn't be too hard to follow. Over the last three months, interest rates for a 30-year fixed mortgage have been hovering around 4.5 percent and the rates for a 15-year fixed mortgage around 3.6 percent.


Getty Images

Home prices are also expected to stabilize more so because investors, who have been driving up the home bidding, are expected to exit the market soon. According to a survey by ORC International, 48 percent of investors plan to curtail home purchases. (See Analysis: Waning investor demand opens door for first-time U.S. homebuyers)

While this is one of the best times to re-enter the market or get into the market, Orman says you must still be wise and make sure you have an eight-month emergency fund in case "something happens and you don't have money coming in."

See what else Suze Orman has to say every Saturday at 9 p.m. EDT on CNBC.

See more of "The Suze Orman Show"

—By CNBC's Sakina Spruell. Follow her on Twitter @SakinaCNBC.

Contact Suze Orman Show

  • Showtimes

    United States
    Saturday 5a | 9p | 12a ET
    Sunday 4a | 5a ET
    Asia (SIN/HK)
    Saturdays 07:00, 11:00, 16:00
    Sundays 01:00, 05:00, 11:00, 16:00
    Australia (SYD)
    Saturdays 09:00, 16:00, 23:00
    Sundays 05:00, 11:00, 16:00, 23:00
    Mondays 05:00
    New Zealand (NZ)
    Saturdays 11:00, 18:00
    Sundays 01:00, 07:00, 13:00, 18:00
    Mondays 01:00, 07:00
  • Host of "The Suze Orman Show," Orman is a two-time Emmy Award-winning television host and an expert on personal finance.

Suze Says