Despite the gloom and doom of the financial market, buying a home that you plan to live in for 5 to 10 years is not a bad idea if you meet the financial requirements.

Let's run some rough numbers: First-time buyers purchase a home for $400,000 with 20 percent down ($80,000). The loan amount is $320,000 (let's assume the buyer paid all the fees, costs, etc.). At a 6% interest rate your interest payment is around $1920 per month for a 30-year loan. Incorporating the cost of property tax ($400) and insurance ($70) your mortgage payment is $2390. If you are also paying principal on the loan, let's guestimate another $300. So your monthly mortgage is between $2390 and $2690.

While that's some serious change, and I'm not recommending anyone purchase a home they can't afford, let's look at the comparison. Say you rent the same home for $1700/month. Using the interest-only figure for the comparison ($2390), after 5 years:

Renting: $102,000 spent over 5 years
Owning: $143,400 spent over 5 years

So how likely is it that in those five years your home will go up in value $41,400? Yep, it's quite possible. Even probable. If you're handy around the house, you certainly can do a number of improvements yourself and gain sweat equity that benefits you even in a difficult market.

Yes, you put down $80,000. I'm not forgetting that. But it's unlikely you stuck that saved $41K in the bank while you were renting and "saving all that money." If you paid principal in addition to the interest, then you gain equity by paying against the balance of the loan. So at $300/month you've paid off $18,000 of your $320,000 loan.

Sure, you may own a home and drive an older car. But economically, borrowing to buy a house is money far better spent than borrowing to buy a new car. Fat chance that car will go up in value in five years.

Lenders are looking at communities and geographic areas to determine "depreciating markets." If you are buing in a depreciating market, the lender may be extremely cautious or refuse to loan on the property based on the loan-to-value ratio. Here's the catch-22: If it takes 30 to 45 days to get approval for a loan, your escrow period will be approx. 15 to 30 days more. Over a 60-day period it is possible your purchase in a depreciating market may depreciate below the contract sales price. Your lender may want to renegotiate the terms–the loan amount or sales price–before funding.

Having flexibility in your cash down is wise…and one way to offset this type of situation. More cash down drops the loan-to-value ratio. Alternately, proceed as far toward the approval process and get a fixed figure not to exceed in mind. If you can get approved for a $600K purchase, find a home under $600K to allow some wiggle-room.

Wow! This is an incredible upstairs condo in a setting you won't believe. Check out the virtual tour to see some stunning shots of the community!

This condo is located at 19303 Vineyard Lane in Saratoga. It's an upstairs, 2 Bedroom, 1 Bath sunny end unit that features formal entry & open floor plan with living room/dining room combo. It has cathedral ceilings throughout with stunning fireplace accent in living room. Private balcony off both bedrooms, walk-in closet, double-pane windows, decorator paint schemes, A/C, 1-car garage. Community features clubhouse, exercise room, walking paths, swimming pool & more! You must see the photos to appreciate. It's a beautiful community!

Click here to view the virtual tour: http://www.tourfactory.com/453994

Just listed–a great starter home for a buyer looking to build equity. This 3 bedroom home is well-maintained (not a fixer!) with stunning hardwood floors. Seller has invested in refinishing the floors, new carpet in family room, fresh interior paint, new vinyl floors. It's clean and move-in ready, located in a good neighborhood. Live in it for a few years and update the kitchen and/or baths to build up equity.

41245 Ellen Street, Fremont - Listed at $548,000

View the virtual tour at: http://www.tourfactory.com/448107

It is customary that items permanently attached to the structure stay with the structure. Built-in appliances, wall-to-wall carpeting, blinds and attached lighting fixtures are usually considered “real property” and are sold with the house. “Personal property” applies to items that are not integral to the home, are not attached to the structure itself, and can be removed without significant alteration.

However, “attached” objects like storage sheds, garden ornaments, and even prized rose bushes outside the house are more likely to be thought of as personal property than real property. Freestanding items are very likely to be kept and removed by the sellers. If you are buying the home because of the beautiful the back yard water sculpture or garage storage cabinetry, make sure it's staying!

Some sellers will omit such items from the listing they plan to remove, and/or place a note on the items when the house is on the market indicating what will be removed. Decorative items in the garden, unsecured spa or shed, and custom drapes that match furniture could be “personal property” of the seller. If you have any doubt….include in the purchase contract the specific items that may fall into these “gray” areas.