I hear this a lot these days, but it just is not true. There are billions of dollars out there for the qualified buyer. I think the key word here is "qualified".
Over the past several years now we have come to expect that there would be a specialty mortgage program that could get anyone qualified. No down payment loans, 80/20's, interest only, and no doc loans. Seems like really all you needed to do was be able to "fog a mirror" and there would be a great loan product for you.
Well, that was then and this is now. Pretty profound, huh? It was these predatory loan practices that helped put the country and perhaps the world in the financial predicament we are in today. But, again, that was then.
Today if you have credit scores in the low 700's(lets say 720 or above), an established job and a good debt to income ratio you are on your way to home ownership. You will need to have a down payment of 3.5% of the purchase price to comply with an FHA loan. Or, if you are looking at a jumbo purchase, a purchase with the loan amount above $417,000, you will need to come to the table with a downpayment of 20% and satisfy the requirements mentioned above.
This may seem like we are taking a backward step, but in reality all we are doing is getting back to responsible lending and borrowing.
If you are thinking about buying a home in todays market, I would advise you to partner with a Realtor you trust and then meet with a good lender to determine what you can truly afford to purchase, and then start a program to make this purchase happen.
There has never been a better time to purchase, whether a first time purchase or an upward movement on home ownership. Prices have come down 20-30% depending on the part of the country you are looking. It is a buyers market, so don't be afraid to dicker a bit. If you are a home owner and need to sell to buy, you may feel that you can't afford to take the hit by selling now. Keep in mind that the loss of value that you feel you will experience when you sell, you should be able to make up in your new purchase. We are all in the same boat.
In a nutshell, buy smart, shop aggressively and quit waiting for the bottom of the market. We are probably already there, so if you wait too long you will be buying in a rising market.
Thursday, May 21, 2009
Thursday, May 14, 2009
What's happening in D.C.?
Washington D.C. in Five Days and Five Nights! Turning my work stay in the nation's capital into a mini vacation/work conference. Saw the Capitol Mall, had lunch in Georgetown and met with Oregon's Senators and Congressmen. The meetings seemed to go well and were received in a give and take conversation. We gave what we would like to see on the National and State levels and we took away an understanding of what we might realistically expect to see in the way of change.
On the National Association of Realtors Mid Year Convention: I heard speakers such as Dr. Alan Greenspan, Secretary of Housing and Urban Development Shaun Donovan and moderator Ron Insana, senior analyst and commentator on CNBC do more than hint that we are seeing the bottom of the housing market, and that there are definite signs of stabilization.
Most believe we are moving into a period of recovery with a loosening of mortgage money in much of the country. One speaker, Alex J. Pollock, Resident Fellow-Financial Policy Issues, American Enterprise Institute, suggested that future home owners should expect to show an ability to qualify for a loan, as, I suppose to the simple need to fog a mirror that we have seen in the past. With a need to have a sizable downpayment, as low as 3.5%, he suggested a novel way to meet this need. Something called, "Save the money till you have enough and then buy the home". I think a long time ago this is how we went about the home buying process. Love this concept. Buy a home with hard earned, and saved, money, pay the house off over the course of 30 years or sooner and presto! Do this 2-3 times in the years between your 20's and 50's and what you end up with is a slow and steady growth to wealth.
On a not quite as optimistic note were the assessments on the Commercial money markets. Kind of dismal here, but it looks like there is attention being paid to this area, and not too soon either. There is over a Trillion dollars of loans that are maturing in the very near future, and no investors on the horizon to renew these loans. That could leave a whole lot of quality strong companies in a very precarious position. We need to see the loosening of this market or our recovery will not be as long lasting as we are hoping for.
What do we need? New banks? Maybe! Healthy new banks might be a breath of fresh air. Congressional help in changing loan limits with FNMA and FHA and other lenders? This will really be a much needed area to focus on and push to the forefront.
Well, this is a little of what I picked up this week. Hope you enjoy my thoughts. Come back with your own...would love to hear them.
On the National Association of Realtors Mid Year Convention: I heard speakers such as Dr. Alan Greenspan, Secretary of Housing and Urban Development Shaun Donovan and moderator Ron Insana, senior analyst and commentator on CNBC do more than hint that we are seeing the bottom of the housing market, and that there are definite signs of stabilization.
Most believe we are moving into a period of recovery with a loosening of mortgage money in much of the country. One speaker, Alex J. Pollock, Resident Fellow-Financial Policy Issues, American Enterprise Institute, suggested that future home owners should expect to show an ability to qualify for a loan, as, I suppose to the simple need to fog a mirror that we have seen in the past. With a need to have a sizable downpayment, as low as 3.5%, he suggested a novel way to meet this need. Something called, "Save the money till you have enough and then buy the home". I think a long time ago this is how we went about the home buying process. Love this concept. Buy a home with hard earned, and saved, money, pay the house off over the course of 30 years or sooner and presto! Do this 2-3 times in the years between your 20's and 50's and what you end up with is a slow and steady growth to wealth.
On a not quite as optimistic note were the assessments on the Commercial money markets. Kind of dismal here, but it looks like there is attention being paid to this area, and not too soon either. There is over a Trillion dollars of loans that are maturing in the very near future, and no investors on the horizon to renew these loans. That could leave a whole lot of quality strong companies in a very precarious position. We need to see the loosening of this market or our recovery will not be as long lasting as we are hoping for.
What do we need? New banks? Maybe! Healthy new banks might be a breath of fresh air. Congressional help in changing loan limits with FNMA and FHA and other lenders? This will really be a much needed area to focus on and push to the forefront.
Well, this is a little of what I picked up this week. Hope you enjoy my thoughts. Come back with your own...would love to hear them.
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