Skip to content

Suze Orman changes homebuying advice

Suze alert! Change of advice

Saturday, 7 Sep 2013 | 9:06 PM ET

A big change to homebuying advice that Suze has been giving viewers for years.

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.

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.

via Suze Orman changes homebuying advice.

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: