This upward swing in new home sales could be a sign that consumers are feeling more confident in the economy as we move forward post recession. Another reason more people may be buying both new and existing homes is the extension of the first time home buyers credit. First-time home buyers are eligible for a maximum tax credit of $8,000 that does not have to repaid for the calendar years 2009-2010. For those who qualify, this tax credit is a good reason to buy a home now versus later.

Another incentive for people to get out there and purchase a new or existing home would be the low mortgage rates that are currently available. Back in 1991 Freddie Mac began keeping track of weekly interest rates and how they fluctuated. Fifteen-year mortgage rates have hit 4.29 percent in November, the lowest in 18 years. The same is true for 30 year mortgage rates, which came in at 4.78 percent which equals the lowest rate since 1971. What this means for potential home owners is lower mortgage payments which in turn increases the number of people who will qualify for a mortgage.

If you are thinking about purchasing a home, now might be a good time to make your move. It is important the everyone, especially first time home buyers goes into the experience knowing what to expect. Financial lingo and mortgage terms can quickly become confusing or overwhelming to a person unfamiliar with the process. Before signing on the bottom line consider the following tips:

• Become familiar with loan types and basic language used in the mortgage process- You can’t make a smart decision without all the facts. If you don’t know what your lender is talking about, you are at a distinct disadvantage going into this arrangement.

• Understand the process- Buying a home can be a complicated and drawn out procedure fraught with obstacles many home buyers never anticipate. Similar to understanding loan types, it is equally important to educate yourself on the entire home buying process. Know the roles of your real estate agent, loan officer, loan processor and anyone else involved in the purchase. You should also have a solid understanding of your own role and responsibilities as a borrower and home buyer.

• Buy what you can afford- There is a difference between what you are qualified to borrow and what you can afford to spend. Consider the impact on your budget carefully before buying a home that will limit your ability to live comfortably and reach other financial goals.

If buying a home wasn’t on your to-do list before you might want to wait until the time is right for you and your family. Conversely, anyone who was previously contemplating becoming a home owner might just find enough incentives in the current market to take the next big step. Whatever your position, buying a home is a serious investment and one that should be not be taken lightly regardless of what everyone else is doing.

Home Sales Are On The Rise was created by and is property of American Consumer News.