Glad to oblige.
Posted on 08/11/2007 4:58:13 AM PDT by Hydroshock
NEW YORK (CNNMoney.com) -- The stock market is going crazy. Hedge funds are going under. But for the average American looking for a home loan, the crisis in the subprime mortgage market may actually be good news.
"Not only is it nothing to worry about, it's an absolute positive," said Loni Graiver, president of the Maine-based Cumberland County Mortgage. "Not only have [home] valuations come down, but [interest rates] are still historically low."
Rates on 30-year fixed loans dipped last week, to 6.41 percent, according to the Mortgage Banker's Association.
In addition, tightened lending standards stemming from the subprime crisis likely mean fewer buyers, pushing down home prices.
The one catch is this: You've got to be a buyer with good credit, a low debt to income ratio, a healthy down payment, verifiable income, and looking to finance less than $417,000 (the cutoff for so-called jumbo loans).
Those characteristics basically define someone who qualifies for a loan through a government program like Fannie Mae, which makes up about 50 percent of all outstanding mortgages, according to Guy Cecala, publisher of the industry newsletter Inside Mortgage Finance.
(Excerpt) Read more at money.cnn.com ...
Looks like sanity has returned, at least for a while..........
Maybe, but I am still in wait and see mode. Real estate and mortgage sales droids can be creative.
Yep, just give 'em some time......
In other words, you can’t be a Demoncratic voter.
All of this is making homes more affordable for young, first-time home buyers. Here on Long Island many older residents (myself included) have seen the real values of their homes decline.
However, if you take a longer view, what future does a community have if young families cannot afford to stay?
My advice to young people looking for their first homes:
Negotiate hard.
True enough but they had little to do with the current troubles. Worldwide acceptance of risk shot up these past few years. Those risky mortgages were packaged into securities and sold to investment bankers and individuals who demanded high rates of interest regardless of risk.
Glad to oblige.
MY father was a contractor, homebuilder and had a RE licence in TX for over 30 years. We had a talk about this over Christmas. He said, “There is a name for a person who is buying a house with no money down and paying interest only, they are called renters. But in fact they are worse off then renters, they have to maintain the property and pay taxes adn insurance.”
isn't this the same way our moms and dads bought their house?
I would never buy a house unless I could put at least 10% down plus closing costs, and afford 120% of the total payment on a 30 year fixed. And perferrably a 15 year.
IMO, we'll start seeing a lot more FHA buyers.
Maximum of 3% required into the deal...and financed (tacked on) mortgage insurance.
Appraisals will be getting 2nd and 3rd looks...past sales with seller subsidies will be scrutinized before they can be valid comps.
Been through this before...
I talked to the bank about a commercial mortgage yesterday - 7% , 25 year fixed “shouldn’t be a problem”.
Depends on where you live. Here in GSO, NC it’s still cheaper to buy with 0% and pay taxes & insurance than to rent and you are at least building equity and don’t have to worry about re-negotiating a contract each 6m/1y. At least in most forms of houses/condos/apartments that get rented/purchased. It might be different on the high end (rent/mortgage over 2k a month) but there is very little of that here anyway.
Bump!
Good advice, but I’d add one thing. Only buy what you can afford. Younger couples today do not look at “starter homes.” They want their first home to be just like mom and dad’s that they got after starting low and moving up.
So in practice e.g. in Boston what happens is young professionals do not buy - they rent, and 4 to a house.
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