Home Buyer Beware - Know the Signs of Real Estate Market
Lots of articles have appeared recently about the booming real
estate market in the United States. Home prices, especially on
the East and West coasts, are not only at record levels, but are
increasing at record rates. In some areas around Washington, D.C.
and San Francisco, home prices have tripled in the last five
years. While many homeowners have been enjoying huge increases in
their equity, realized when they either sell their home or borrow
against it, the market has become increasingly difficult for
those trying to buy homes. It may get worse, as there are now
some strong signs that the market may be near its peak:
- The prices of homes in many markets are so high that few
buyers can purchase them using traditional mortgages. In
Washington, D.C., for instance, 48% of new mortgages are of the
interest-only variety, where the buyer pays only the interest
on the loan for the first few years. This keeps the payments
low enough that the buyer can qualify for the loan. The problem
is that the buyer is only paying interest and not actually
contributing to the purchase price of the home. The fact that
so many buyers are obtaining interest-only loans suggests that
prices in those markets may be too high to be sustained.
- Many home appraisers have complained that lenders are
constantly pressuring them to "make the numbers" when
appraising homes. Appraisers in some modestly-appreciating
markets, such as Buffalo, NY, say that they are often given a
value when assigned an appraisal, with the unspoken
understanding that their appraisal is expected to come in at or
above that figure. The lending industry is competitive, and
lenders want to issue as many loans as possible. It would
appear that quite a few of them are even willing to lend money
when the home doesn't appraise for the asking price. Appraisers
point out that if they don't provide the "requested" figures,
then the lenders will simply hire other appraisers.
- The foreclosure rate is increasing. The rate increased in
March and April over the same months last year, suggesting that
more buyers may have discovered that they have mortgages on
which they cannot make the payments. The foreclosure rates are
the highest in Florida and Texas, which have foreclosure rates
that are nearly triple the national average. With interest
rates near historic lows, mortgages are more likely to become
even less affordable as interest rates increase.
What this means for prospective buyers is that they must do
even more research before buying a home. Buyers should genuinely
consider whether or not they could actually afford to make home
payments that include a reduction in principal. If a buyer can't
afford a home without taking out an interest-only loan, the buyer
probably can't afford the home. Buyers should be suspicious of
home appraisals and should, if possible, ask the appraiser if
they are being pressured to provide a predetermined figure. Every
buyer wants his or her home to appraise for at least the amount
of the loan. But the current market is one where buyers are
straining to make payments on prices that are at record levels.
The last thing any buyer wants is to strain to make payments on a
mortgage that exceeds the value of the home. The real estate
market is in a precarious state at the moment, and prospective
buyers should do as much research as possible to make sure that
they can both pay for, and keep, their new home.
©Copyright 2005 by Retro Marketing.
Charles Essmeier is the owner of Retro Marketing, a firm
devoted to informational Websites, including End-Your-Debt.com, a
website devoted to debt consolidation information
and HomeEquityHelp.net, a site devoted to information on
MORE RESOURCES updated Thu. January / 18 / 2018
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news
Cruel Ways Big Banks Are Ripping Off Their CustomersTheStreet.combased Born to Sell, recently applied for a mortgage refinance loan at Citibank (C) . Little did he know that he'd get the short end of the stick, and in a big way. Scanlin checked every item off on the mortgage process list, paid $15.85 to have a ...
West Is Best for Credit Union GrowthCredit Union TimesA tight labor market. Employers are having increasing difficulty finding workers, which will be a limiting factor for the economy. A sellers' housing market. The supply of homes in most markets are reaching historic lows and could tighten further as ...
RELATED MORTGAGE AND REFINANCING ARTICLES:
Be Prepared when Seeking
When you're looking for a mortgage, whether it's a first
time loan or you're taking advantage of an opportunity to
refinance an existing mortgage, it may seem that you're
wading through a quagmire of uncharted territory. If you're
prepared ahead of time, you'll avoid some of the common
pitfalls and know how to find the best deal for your
Home Mortgage Loan
Refinancing Online - 3 Tips on Refinancing Your
When refinancing your home, it's helpful to know a few
things about refinancing. When you refinance, you usually
pay off the old loan and sign for a new loan, whether you
are refinancing your 1st mortgage, second mortgage or home
Home Equity Loans - Are
They Right For You?
The bills are out of control and you need a new car. "Maybe
we can get a new carpet and paint the house", you say to
The Zero Down 80/20
This is an excellent loan for those that are lacking the
down payment required for other types of mortgages. The 80
20 mortgage is simply two loans for 100% of the purchase
Zero Down Mortgage Loans
- Is 100% Financing a Good Idea and Can You Get
Are you wondering if you can get approved for a home loan
with 100% financing? Are you also wondering if its a good
idea to get a mortgage loan with no money down? Here are
some points to keep in mind as you apply and consider your
different mortgage loan options.To qualify for 100%
financing on a purchase mortgage loan, it would be
important for you to have a credit score of at least 600 or
Bad Credit Mortgage
Loans - How To Get Approved
Persistence is the key working toward getting approved for
a bad credit mortgage loan. There are many factors that
you, as a borrower have control over that can help you get
approved faster and easier.
Home or Investment
Property Equity: Be Sure the Bank Gives You All that You
Home equity is your own personal money machine. If you want
financial freedom, a home equity loan is probably the best
way to achieve it.
Refinance Your Home
Refinancing your home equity loan is an excellent way to
save money. By refinancing your home equity loan you can
lower your interest rate and finance for a longer or
Home Equity Lines of
Credit Vs. Other Conventional Loans
When it comes to getting money, you have two basic options.
If you are a homeowner you can choose to take out a home
equity line or credit (HELOC), or you can take out a
Home Loans: Where Do I
So you've finally decided you've had enough of paying rent
and want to jump into home ownership. Well you've got your
work cut out for you.
Renters Have Much to
Gain by Pursuing Home Ownership
Buying a home vs. renting is a big decision that takes
careful consideration, as most mortgage consultants will
What is the PayOption
Imagine an adjustable rate mortgage that allows you to pick
one of four payment options on your monthly mortgage bill.
It is an ARM on which the interest rate adjusts monthly and
the payment adjusts annually, with borrowers offered
options on how large a payment they will make.
Outlined below are some useful flexible mortgage tips. The
most prominent addition in recent years to the mortgage
industry has been the flexible mortgage.
What Length Mortgage Is
Right For You?
You've found the home that is right for you, and now you
need to do the same thing for a mortgage. There are several
options for people out there, each one designed for a
different type of buyer.
Mortgage Clarksville -
Find the Best Deal
Searching for a mortgage can sometimes be a hassle. Where
to apply, who to apply with, what deal to take.
Home Mortgage Quotes
Online - How Do They Compare To a Quote From a Broker in
The Real World?
Online home mortgage quotes are very similar to the quotes
given by mortgage brokers in "the real world," except
lower. With the reduced cost due to a simplified
application process and reduce overhead for office space
and personnel, online mortgage lenders can offer financing
with no fees or lower interest rates.
New Home Loan -
Understand The Various Types Of Mortgage
So, you've decided to buy a house, and you're ready for
that all important next step-applying for a mortgage loan.
But where should you go? After all, the mortgage business
is complex, and you've realized quickly that your choices
for lenders are immense.
When Not To Agree To A
Home Equity Loan
Before you borrow money on your home's equity, think twice
so you don't end up paying more than you expected. According
to the Federal Trade Commission, homeowners-particularly
elderly, minority and those with low incomes or poor credit
should be careful when borrowing money based on their home
Bad Credit Home
There was a time that seems like decades ago when people
with less than pristine credit were not able to get home
loans. At that time people with bad credit were all but
assured that their dreams of homeownership would never come
A Home Equity Loan -
What You Should Know?
Asking yourself, "Is a home equity loan right for me?" is
the first and most important step to take. Home equity loans
have become so popular today because of increasing home
used office furnishings-supplies-equipment-desks-cubicles-service-counters for
sale in Akron Ohio
Die cast model cars for sale in Akron Ohio
used cars for sale in Akron Ohio
unfurnished homes for
rent in Akron Ohio
ARM compare rates find the best rates current in your area lenders read reviews calculator adjustable rate loan home lenders brokers
quotes florida houston gmac washington interest only 2nd software debt consolidation
reverse senior equity texas maryland options lending bad credit
option one ameriquest chase first banks emc residential california miami dallas est branch marketing
home company commercial yahoo online bad credit low credit no credit