'Can I Afford It?' Home Edition
Home prices are down and your motivation to buy is up. But, Can You Afford It? Many realtors are saying you have to buy now because real estate prices are increasing. Suze doesn't think so!
Before you think about buying a home, here are two questions Suze says you should ask yourself:
- What is happening to the price of real estate in my area?
- Are mortgage interest rates increasing?
Here are the forces, she says, that need to be in place for real estate prices to rise:
- The demand for homes must be greater than the supply. With all the homes for sale, all the short sales & foreclosures out there, the supply still far outweighs the demand in most places.
- Employment is increasing. There are jobs for people and reasons people move into the area & need to buy homes.
- Mortgage Rates decrease or are low
Currently, mortgage interest rates are low but Suze believes they will increase shortly. So, if you are about to buy real estate, she says you should lock in the interest rate now.
Now that you have the basic rules, share your opinion on whether the following people can afford to buy or not. Then watch Suze's answers on a special CAN I AFFORD IT? HOME EDITION of The Suze Orman Show, Saturday, June 19th at 9p ET on CNBC.
Here are a few you will see on Saturday's show.
Do You Think These Home Buyers Qualify?
Caroline, 25, and her fiancé graduated college a couple of years ago. They just got engaged and are looking to buy their first home.
How they would pay for it:
The couple is thinking about using 3-5 percent of their savings as a down payment.
- Income: $6,700/combined
- Expenses: $3,646/mo., rent $1,650/mo.
- Debt: $46K Student Loans @2.48% - 6.8%
- Savings: $21K Liquid, $9K Investments, $715 Retirement
Would you approve or deny?
Will Suze approve or deny? Find out on the Can I Afford It? Home Edition
of The Suze Orman Show, Saturday, June 19th on CNBC, 9p ET.