Is This The Best Time to Buy a Home? Reading this could make you say, Yes
Eugene Oregon
I am always being asked whether I think it's a good time to buy real estate. Until recently because of the housing crisis it was a tough question to answer, at that point I really need to get more information from that person to determine whether it's really a good time for them to purchase or not.
With the recent events that are taking place in Washington along with the lowest interest rates we've seen in decades and home prices that have declined significantly, I would say that now may be the best time to buy that we will ever see. I'm starting to see signs of this as I talk with people and their homes have finally sold and they're now purchasing the homes that they've been watching go down in price for some time.
In Washington , Congress is now contemplating the Emergency Home Ownership and Mortgage Protection Act. The provisions of this bill would allow judges presiding over bankruptcy cases to alter the homeowners' mortgage terms, including interest rates, payback periods and principal balances.
At first glance you may think this is a great opportunity to help bail out homeowners that made poor decisions and possibly got into loans that they really had no idea what the consequences would be.
If you look into this a little deeper and realize that mortgages would no longer be viewed as contracts, but more like a "list of suggestions" and that judges had the power to dictate to the bank's what they will actually receive. The consequences of this will be catastrophic to the banking industry and to keep themselves from going belly-up they will have to make adjustments. Let's look at what kind of adjustments they may have to make.
The Mortgage Bankers Association has been looking very closely at this new bill. The results?... The mortgage bankers estimate that the new uncertainties introduced into the market by this bill would require boosting interest rates on future mortgages by 1.5 percentage points. That would mean an increase of $234 per month on a Lane County, OR home loan of $239,883 assuming 10% down payment and the average sales price in 2007 of $ 266,537.
That's right, the person financing $239,883.00 would now be paying an additional $234.00 per month. That should make today's home ownership with our current low prices and very low interest rates a great deal. Now add into this equation; hiring a good buyer's broker to help you negotiate an even lower price and today's buyer's market, and this very well could be “The Best Time to Buy a Home”
If you are interested in more information on this subject or if you would like to talk to someone about purchasing a home in Oregon you can contact Dennis Pease, RE/MAX Integrity Real Estate Broker servicing all of Lane County Oregon, from the Central Coast in Florence, OR to the Willamette Valley including Eugene and Springfield, OR with agents covering all of Western Oregon.
Date: 2008-01-24 22:04:03Views: 435
Comments
Dennis
Mike, I am mostly with you on the bailout. In Americas history it was common for banks to to out of business for bad lending practices, but it goes deeper than that in todays world. The Government mandated that lenders make subprime loans to people that should never have qualified which does throw blame on the Government. I have personally seen buyers qualify for 100% financing with credit scores under 600 and with numerous unpaid loans. Now a realistic lender should question that if this buyer has a history of not paying their bills, what would make you think they will make all their payments on a 100% financed home. So normally you would blame the lender for making ridiculous lending decisions, but since the US Government required lenders to make these subprime loans I would have to say the Government has some responsibility here.
Sam in Austin
Market dependent, this is a great time to buy. You can either get a little more house or buy what you want and stick the additional $234 straight into savings.
Milan in Portland
I hope that the folks in DC realize that it's actually not in consumers best interest to give judges the power to alter the terms of their mortgages as you described. It will certainly increase uncertainty from the banks perspective and cause a rise in rates if this actually goes through.
Dennis
One thing we can count on, is that we can not count on our Government to get it right.
Under current law, bankruptcy courts can establish a payment plan for overdue mortgage payments but cannot change the amount, timing, or interest rate terms of mortgage payments.
A bankruptcy judge can make substantive changes to mortgages on secondary or vacation homes under current law. So it wouldn't surprise me to see this pass. It is estimated that if it passes it could go into affect sometime in mid 2008.
Jim Boyer
very good article Dennis, This is a fantastic time to buy. One of the Statistics experts in our area is predicting that 2008 will be looked at as the best time to be a home buyer here in New Jersey for the last 20 years.
Joey Martini
Great post, I think it's a good time, but only for the people who can afford it. I'm thinking about taking real estate, but the problem with this economy, it's not really encouraging.
Retirement Communities
I'm 99% against the bailout. When you purchase a stock and the value goes down the government does not bail you out for your loss. As far as it being a great time to buy I concur. Our local market in Coastal Delaware has twice the inventory we did two years ago, Average time on the market is almost a year and many sellers are anxious to unload their homes so they can move on to other things. I am personally watching the sheriff's sales to pick up a couple of rental units. Thanks for the informative post.
- Mike Brown