Buy Now or Wait

Buy Now or Wait
Uncertainty as to whether prices will continue to fall has to be one of the most com
mon causes of buyer procrastination.  Paying too much wouldn’t be a smart thing but price isn’t the only factor to consider.  Interest rates have as much effect on housing costs as price.
A small increase in mortgage interest rates can offset a significant drop in home prices.  If the price of the home were to come down by 5% but the interest rates were to go up by .5%, the payments might be close to the same.
In the example below, if the price of $175,000 home went down 5% but the interest rate went from 4.75% to 5.25%, the payments would actually be $4.98 more at the cheaper price.  If while the buyer was waiting for the home to decrease 5% and the interest rate increased by 1%, the payments would actually go up by $55.30.
Then, of course, there is always the possiblility that the price of the home doesn’t go down but the rate does go up by 1%.  The payments would be $104.58 more per month, each and every month for as long as you have the mortgage on the home.
As a Residential Finance Consultant, I can provide solid information that will help you make better buying decisions.  A home is a place to feel safe and secure, to raise your family, share with your friends and an investment.  It’s an investment in your marriage, your family and your future.  You owe it to yourself to check out the real numbers in your market because every market is different.

source: RFC

Not So Fast Buyers!

One of the challenges buyers are having with financing may be their own understanding or lack thereof.

In a recent survey done by research firm Ipsos for Zillow, a surprising number of incorrect answers to true or false questions were given by prospective buyers.
Over 3/4 didn’t realize how the mortgage rate was determined for a borrower thinking that annual income was the most important factor. Other considerations lenders do evaluate are credit score, debt-to-income and loan-to-value ratios.
A variety of myths seem to have influenced some of the common answers such as interest rates are set and released once a day; FHA loans are for first-time buyers only; prequalification commits the lender; lender fees are not negotiable and adjustable rate mortgages always go up.
Buyers’ misunderstanding of actual mortgage practices may give some insight into why more of them are not taking advantage of the greatly reduced prices and incredibly low mortgage rates.
While getting solid information about mortgages and being pre-approved from a lender are very important, it is only one step in the home buying process. Success in buying a home in today’s unique market should begin with a real estate professional that will coordinate all of the different parts of the transaction including mortgage, title, insurance and inspections.

Article provided by:RFC: Point of Difference Weekly Consumer Article

Non Sufficient Funds

NFS (non-sufficient funds), When you are applying for a mortgage loan, NFS is a RED FLAG to the underwriter reviewing your loan file.   Finding more than 1  NFS on a bank statement provided by the customer can raise great concern.  If the underwriter sees a spending style that is very paycheck to paycheck & the account is close to being over drawn on a regular basis- this will also raise great concern no matter what the explanation may be from the customer.  Although if the underwriter sees a mistake, an unexpected expense, or some other reason that can explain the NSF, and the customer’s credit file shows that the risk the lender is about to take on the customer is safe, then an overdraft charge is allowed. It all depends on the situation, and how borderline the customer’s credit file is.

More Affordable Than Ever

I received this article today from and wanted to share:

More Affordable Than Ever

The Housing Affordability Index reached a record high of 192.3 for February, 2011. Two contributing factors to the Index are the price adjustments homes have experienced in recent years combined with the unusually low mortgage rates make this an outstanding opportunity for buyers who can qualify.

Before the housing bubble burst in 2006, the index average for the year was 108. The high prices and higher interest rates restricted many buyers from purchasing. As the market started to deteriorate, which resulted in declining values and lower interest rates, the index started to rise.

The opportunities are not being seized by buyers and some real estate professionals feel that it’s because there is confusion in the marketplace. Buyers are uncertain whether they would qualify and whether now is a good time to be purchasing a home.

All markets are different and every situation is unique. The only certain way to determine would be to investigate your individual situation. You owe it to yourself and your family to visit with a real estate professional who can show you the real cost of housing and recommend a lender.

The National Association of Realtors releases the index at the end of each month with a two month lag time for compiling the information. When the index is at 100, a median income family can afford a median price home. As the index increases, housing affordability increases.