The New Mortgage Market - What to Expect
By Amy Bonis
The mortgage market has changed but for many, it has gotten
better. Most folks don't know this. Interest rates have come
down. Tell your friends and neighbors and be happy. Now, for
those of us currently without jobs, or those that have some
credit issues and no money down, the approval requirements
have become a bit stricter as they should. On the flip
side, new first time buyer programs have evolved that are
absolutely fantastic and even offer below market interest
rates. Even with all these good things happening, we find
that there are many folks out there right now paralyzed by
the negativity of the press. We term this analysis
paralysis! Folks want to buy or refinance a home, or
investment property but are scared. They don't realize how
good we have it here, especially in the RTP area which is
really a bright light in the USA right now. This is a great
market here. People think "I am not sure I want to sell my
home right now but I really do want to buy a new home.."
They may not really realize they can buy that bigger home
and get a really good deal on the next house and the
mortgage right now. The home they are buying is more
expensive than the home they live in currently, this can be
a good leverage advantage. The other thing to consider here
in the RTP area is consider keeping your home, renting it
and buying another home. We do have a strong rental market
here. Don't be too fearful of making a move, if you wait
until everyone else makes a move, then the laws of supply
and demand kick in and prices go up as demand goes up.
Here is more good news; Mortgage rates really have come down
quite a bit. Most folks are not aware of this at all.
Mortgage rates are at 12 month lows. It is a GREAT time to
refinance, look at mortgage options and get out of
adjustable rate loans. Many families are considering equity
repositioning and taking cash out of their homes to buy
other properties and taking advantage of the real estate
market. Many investors are sitting on the sidelines waiting
to pounce on every good deal they can get their hands on.
There have been some excellent new loan products that have
come out in the market, particularly for first time home
buyers to help them get into homes. Here are a few: down
payment assistance programs, bond programs with below market
interest rates, programs that are 100% financing with no
mortgage insurance (even if you are not a first time home
buyer)! Folks are just not aware of this good stuff because
the media is showing more bad things than good things right
now. This scares people. Have the courage to step outside
of what the press is telling you and examine what our
geographic market offers. It could be huge opportunity for
you.
What has changed? You want to know the facts:
1. If you have credit issues, it will be more important now
to get a formal preapproval with a lender that you meet
with. Allow your mortgage planner to help you get a better
deal/rate by helping give you tips to increase your credit
scores. We do this at no cost for our clients. Look for
our credit improvement workshops on line.
2. No doc loans- These are loans where no income or no
assets are verified. These have become much tougher to do
in the current mortgage market. If you need this type of
product, talk to a certified mortgage planner in advance of
purchasing.
3. When buying investment property, you need to put down
approximately ten percent. There are no PMI options only
with 10% down. This is a good thing and makes more of the
payment tax deductible.
4. As with all things in our world, business cycles as does
everything. This is normal and expected and necessary. We
as lenders are not giving zero down loans to folks who do
not have enough income or who do not have decent credit any
more. It is my opinion that the mortgage market was in a
way a microcosm of our economy. The market was/is looking
ways to make money and just became too lenient w/ some
practices. This is why the mortgage correction happened.
This is a natural cycle and happens in every business. For
the many of our customers there is a big opportunity to buy
now. We are in a great market and many families are finding
ways to take advantage of moving up, renting their existing
homes and cashing in on these low rates. There is a lot of
information on Real Estate Investing as a wealth building
tool and you are welcome to check our website for upcoming
workshops.
Talk to your real estate agent about your current situation
they are great partners and can give you an accurate idea
about both your current property situation and your new
property scenario. They know the market better than anyone.
If you have any specific questions at all on home or
investor financing, visit
Amy Bonis, Certified Mortgage Analyst or read more
articles on her
site.
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