We want to buy a house. Over the last few months Tasha and I have been saving money, paying off any debt and basically doing anything we can to get better credit for a lower interest rate on a mortgage. The current state of the housing market is starting to mean that a hard working couple can actually afford to purchase a home. With this big purchase on the horizon I have been doing a ton of research on how the whole process works. I've read a lot of horror stories about the people who have lost homes because of resetting interest rates and realtors and home builders who have no work to do. It's all tragic and I feel for them but at the same time I know I would never let myself get in that situation. When you are doing the finances on buying a home the first thing people look at is the monthly payment. When you see that number do you say to yourself that is the most I can afford and maybe have enough left over to buy food and pay for electricity? If so you probably shouldn't be buying a house or as nice as a house. If you can't handle a $500 dollar swing in the monthly payment you should opt for the fixed rate mortgage instead of the adjustable. And for all means read the fine print! Would you get a mortgage that penalizes you for paying it out early or lets your APR jump by 4% in a year? The internet has millions and I mean millions of articles to help educate you on the whole process.

That is why when I see things like the government bailout of the mortgage industry coming down the pipe I get really upset. I actually see a couple of really good things in that. Like the added transparency in the mortgage process so consumers aren't suprised is great. When you bail out these people all your doing is proping up an industry that is need of a burst. Bailing these people out will only delay the inevitable. The reality is most people cannot afford the cost of the homes. Where I live you can't get much of a single family for under $300K. That is until recently. My estimate - 99% of first time buyers who purchase a $450K house when they can only afford a $300K one get forclosed on. Even with any sort of government bail out.

One thing that still drives me crazy is why on earth would a bank lend someone money with stated income? "Oh I make 1.5 million a year working at McDonalds" said the applicant. "Approved" says the bank. No wonder we are in the mess we are in. People spending money they don't have in this country is a virus and sooner or later it affects us all.

Here are some good sources of information for anyone that might be looking to buy a home in the near future. Good content updated regularly.

Blown Mortgage

Blueprint for Financial Prosperity

The Great Loan Blog

The Simple Dollar

Housing Doom

Calculated Risk

Get Rich Slowly

and of course for finding a home this place is great -
http://ziprealty.com/

If anyone has any others let me know. I thirst for knowledge.

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