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New House Risks

In: Business and Management

Submitted By kfoxboarder
Words 357
Pages 2
Kevin Fox
XECO212
2-11-14
New Home Risk and Benefits There are many risks associated with purchasing a new home. Understanding what the risks and benefits that are associated with purchasing a new home will help a potential buyer make the right decision. I recently purchased my first home last year, and found myself weighing in on all the benefits and risks associated with my first home purchase. A couple of more recent fiscal policies that the government implemented recently were the first time home buyer credit and a new low interest rate of 3.1% for qualifying buyers towards a first home purchase. These two policies that were implemented by the government were meant to change the demand for homes in the economy and target new home buyers to purchase their first new home. This in return would jump start a boost in the economy by theory. These two policies where what made my decide to purchase a new home because they were and are great incentives. The first time home buyer tax break/ credit has since expired, however all time low mortgage rates are enticing buyers to purchase new homes still. The government also backing FHA loans allows first time home buyers to be approved for their first home loan in a tough economy. If the economy takes off, more houses will be purchased, the values of homes will rise, and eventually interest rates will rise once the government feels that spending is at a high point in order to slow the economy from over growth.
I feel that the risk of buying in a market that is already and currently low is far less than the benefits. You are going into an investment that most likely will drop in value very slightly if any at all, and can only earn equity. There are great benefits to take advantage of, especially the lower interest rates. Houses are at an all time low so what you pay per square foot is generally a great deal, and if you…...

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