I'm worried that all the problems in the home mortgage industry will have a negative effect on obtaining a home loan
Bert, New Orleans
Subscribe to:
Post Comments (Atom)
Kitchen with Handmade Turkish Tile Island Counter
.JPG)
Custom Marble Bath
Finished Home in Lakeview NewOrleans
Whether a Family Home
or Doubles For Rental
Anything's Possible with Modular
Going from this ...................
.JPG)
...........to this 1,700 sq. ft. home. Built to withstand hurricane winds 140-150 mph
Level & demo old house
CLEAR LOT OF ALL DEBRIS
Engineering Plans Passed by Mechanical, Electrical, Plumbing & Structural Engineers
Draw Up Proposed Elevation Plans
Back fill lot to raise elevation
Layout the foundation & drive pilings
Foundation
Poured & Piers Finished - Elevation Survey Completed
Patio Landscaping Complete
5 comments:
All the news looks pretty bad.
Ann in Lakeview
This is a great question ! The following is my opinion only so take it for what it's worth. The problems in the home loan market right now started with sub prime home loans. The news media has been really pushing this story lately, creating a furior.
This type of loan many times allowed borrowers to just "state" their income not verify it, leading to a lot of exaggeration of one's income ! People were approved for larger loans than they could afford based on a loan rate that was below the normal rate - similar to adjustable rate mortgages.
This was all fine & good until rates went up, people defaulted on their loans & properties foreclosed - glutting the market. This is causing a down turn in the real estate market and an upturn in loan rates.
Countrywide Financial, one of the biggest holders of sub prime loans, just borrowed $ 11 billion to help solve its problems. Many people gambled on getting a sub prime loan based on unrealistic promises by their loan officer and they lost !
Freddy Mac loan rates in Jan, 2007 were 6.17% for a 30 yr. fixed loan - now they are 6.68 % The average home loan rate in June of this year was 5.9 % now its about 6.5% These are all averages but my point is the rate increase is minimal. If you have good income & a decent credit rating, you’ll be able to get a home loan. You may have to shop a little more for a good rate. You may have to provide more paper work to verify information.
Unfortunately, I still remember when home loans were over 20% back in 1980-81. This is a market adjustment due to a type of loan (sub prime) that, in my opinion, should never be used by most homeowners. Especially if they are on a strict budget.
i have a feeling that the way the wall street journal is predicting, the market rates are going to continue to rise, as i think gold has historically risen with mortgage rates. your better off waiting it out.
mbs
Re: Gold Market & mortgage rates. The gold market historically is not affected by the mortgage rate market.
As a broker, I can tell you that the gold market is more global; affected by oil prices, political upheaval and overall economics throughout the world market.
The following is a synopsis of the gold, mortgage rate & Dow Jones markets.
In years 1984-85 gold traded from $400 down to low $ 300's. Mortgage rates averaged 13% Dow
1986-87 gold traded from 350 up to
490 when mortgage rates went down to an ave. of 9.2 in 1987. Dow Jones was in the 2,500 range
In 1994 gold was between $370 - 398
as mortgage rates were down around 7.20 % Dow Jones was in the 4,000 range
For most of 1996 gold averaged $390 (trading between $370 - 415)
Mortgage rates were down in the 7.30 % area and the Dow stayed in the 4,000 range.
In 1999 gold stayed mostly flat between $260 - 300. Mortgage interest rates were down to an ave. of 6.90 % and the Dow was up in the 9,000 range.
In 2000 Gold again was flat between $265-290 (spiked once up to $313) Mortgage rates averaged 8.4 % and the Dow up again in the 11,000 area.
Between 2004 - 05 gold traded $420 - 480 while Mortgage rates were down to an ave of 5.80 % while the Dow was around 10,500
I know this was long but it's important to understand.
My advise is to buy your home at any reasonable rate you can afford - its still a better deal than renting. If you want to invest long term stay with real estate & the stock market or mutual funds. Gamble with the gold market if you must.
As for mortgage rates, don't "hold on" waiting to see if the market will get better or worse. If you're looking to buy a home, find it and finance it as long as you can afford it.
You will NEVER be able to buy at the lowest or sell at the highest.
"Holding on" usually means you just missed a few opportunities!
John V. -- 35 years experience in the markets
I agree with John - the price of gold is not tied directly to home loan rates, affected by many other factors.
In my opinion, interest rates will be lowered by the Fed to help ease problems mortgage sector. This lowering may not even affect the rate charged to the borrower. I think it will stay in the 6.0% - 6.5% range & watch the points charged !
Charles Merrell
Post a Comment