Monday, August 06, 2007
More Foreclosure News
Every newspaper seems to have an article on the mortgage industry and the dilemma of subprime mortgages. The Stock Market is taking a beating with fallout and consumers are now on the sidelines trying to figure out if a crash is in process and when the best time to buy a home might be.
If you are one of these buyers trying to decide, then ask the following question:
The home I am looking to purchase is going to be
a) A home I plan on living in longer than 5 years.
b) An investment which I intend to own less than a year to rehab and flip.
If you answered 'a', then the time to buy is now. The variables you cannot account for in the next 12 months include interest rates and lending requirements. Because of the lending fall out, requirements to qualify for loans is getting tougher not easier. If you have less than stellar credit your lending options are getting smaller everyday. If rates go up, even with a moderate reduction in prices your monthly payment will not go down. The Fall and holiday months in this area see a slow down in activity, which will open up buying opportunities as sellers who need to sell will not be as picky if an offer comes their way.
If you answered 'b', then now is the time to get a business plan and do your home work. I really feel unless you have the capital to show up at the foreclosure sales, the homes listed on the Multiple Listing Service will not be priced low enough for a short term flip. Inventory is up and the number of homes sold is low. You will not only need capital for rehab, but maybe several months reserves for payments & utilities while you try to sell.
I think this is a good time to buy. My wife and I answered the question under 'a' and we have purchase a home and are in escrow to close the first week of September.
My next blog entry will be on credit, how to boost your score and what to do to keep from lowering your score.
If you are one of these buyers trying to decide, then ask the following question:
The home I am looking to purchase is going to be
a) A home I plan on living in longer than 5 years.
b) An investment which I intend to own less than a year to rehab and flip.
If you answered 'a', then the time to buy is now. The variables you cannot account for in the next 12 months include interest rates and lending requirements. Because of the lending fall out, requirements to qualify for loans is getting tougher not easier. If you have less than stellar credit your lending options are getting smaller everyday. If rates go up, even with a moderate reduction in prices your monthly payment will not go down. The Fall and holiday months in this area see a slow down in activity, which will open up buying opportunities as sellers who need to sell will not be as picky if an offer comes their way.
If you answered 'b', then now is the time to get a business plan and do your home work. I really feel unless you have the capital to show up at the foreclosure sales, the homes listed on the Multiple Listing Service will not be priced low enough for a short term flip. Inventory is up and the number of homes sold is low. You will not only need capital for rehab, but maybe several months reserves for payments & utilities while you try to sell.
I think this is a good time to buy. My wife and I answered the question under 'a' and we have purchase a home and are in escrow to close the first week of September.
My next blog entry will be on credit, how to boost your score and what to do to keep from lowering your score.
