Freddie Mac's Primary Mortgage Survey for the week of October 1, 2009 shows an interest rate of 4.94 percent for a 30 year fixed rate loan. This is down from 5.04 percent from the week before.



Now is a great time to purchase your first home! The following article from move.com by Chris Rose chronicles a First time buyer success story!



"Determination vs. Intimidation" by Chris Rose.



First time home buying can be an intimidating situation especially when home prices have headed to a point where a quarter of a million dollars would get you a run-down leaky, filthy mess in a bad neighborhood, or a tiny one bedroom studio condo far away from the city-Washington D.C.



Neither of these options interested me, so I needed to plan on spending much more especially when the housing market is generally favorable to the sellers. After my buyer's agent explained to me" their asking price will usually be the starting point of the their negotiations" I felt I was buying in their playground.



To add to my intimidation, I was also single, 26 year old, soon to be law student, with mediocre credit, eminent unemployment(because of school) and only one month at my current summer job.



In spite of all this, I did have what is probably the most important asset for successfully purchasing a new home. I was determined to see it through. I rejected the idea of paying someone else rent during by next three years in school, and knew that purchasing my own home would be the best financial decision I could make. In addition to that I would just feel great.

My scheme for financing my house, while being an unemployed student was based on a bit of serious number crunching. I had about 85,000 in cash to use as a down payment, which is highly unusual for someone in my position.



But, I was also buying in one of the hottest markets in the country, where prices for decent houses were around $400,000. Most lenders like to see a down-payment of at least 20 percent of the purchase price(this helps get the best loan rates.) which meant I could afford a house with about $375, 000.



I was looking at an interest rate of about six percent so I know my payments would be around $1800 a month after factoring insurance and taxes. I would not have that kind of cash without implementing part two of my plan, that is I would be come a landlord myself.



The rise in home prices had also led to the rise in average rent, with simple bedrooms in homes going for $500 to $800. I planned on cashing in on that trend by having tenants live with me in my house. It could work out quite nicely.



While a mediocre two-bedroom condo would have cost me just under $300,000 it would have brought me only $700 in rental income, leaving me to pay about the same myself toward the mortgage.



Instead I bought a four-bedroom home for $378,000, got a much nicer place, and combined rent from a basement apartment type bedroom, and one upstairs bedroom equal to $1650. . . all but $100 of my mortgage payment ended up being. Thus, I was living there for free, while my house continued to rise in value and my loan was getting paid off (albeit slowly.)



Those numbers were as good as they were in part, because I had found a savvy loan officer to help me get an interest rate even better than I imagined. Knowing I would likely sell after graduation, I opted for an adjustable rate mortgage with a rate at just above five percent, instead of the traditional 30 year fixed with a higher rate. I purchased the house literally, the day before I started school,and my first tenant moved in a few days later.



So far being a homeowner has been rewarding, both mentally and financially. I have learned an enormous amount about everything from plumbing to financial management and I continue to benefit from those first few months of really hard work.



While purchasing a new home can be intimidating and it is not a decision to be taken lightly, it is not nearly as frighting as one might think. Getting started is the hardest part. Once the ball gets rolling, however, a determined home buyer will not stop until they pluck the "For Sale" sign from their front lawn. . .and what a sweet sensation that is.