In a recent article titled “Buying a First Home Costs More Than You Think, Especially Now”, The Wall Street Journal described the perils of buying a home in today’s market. With interest rates rising, it can be a risky time to buy a home—and many buyers are making it even more risky buy doing things like stretching their budgets to the max and waiving inspections to get into a house. LDSAgents.com suggests that it’s time to slow down the process and think about what you are getting yourself into.
First, living on the edge financially to get into a house can be fraught with danger when you have to sell. As experienced home owners know, rising interest rates generally result in declining home values. People can only afford so much in monthly payments, and rising rates means that monthly payments for a given house must go up. When that happens, home prices must go down.
Lower home values are nothing new. It happened the last time around in 2008 when millions of people found themselves “upside down” in their homes because they were suddenly worth less than they paid for them. It was a nightmare and you can avoid that scenario by not jumping in too quickly when the economy is so uncertain.
Second, waiving home inspections just because the seller demands it can really bite you in the long run. The Journal gave several examples. In one case, “the seller had two conditions: waive the inspection and promise to go through with the deal even if the property was appraised below the purchase price.” The buyers agreed. On the sweltering summer day they moved in, the air conditioning system went completely out and they had to immediately spend $7000.00 to replace it.
In another case, the sellers gave a couple only 15 minutes to walk through a home before deciding to make an offer. They had an inspection—only to find out after moving in that the inspector missed the fact that most of the windows in the home did not go up and down. They were shocked to receive quotes of roughly $50,000.00 to repair them.
We are living in emotional times and home buyers who let emotions do their bidding often find themselves holding the bag down the road. Right now is a good time to slow down and watch to see how interest rates are affecting the price of homes. Up to now, it has definitely been a “seller’s market.” But don’t let aggressive sellers or your own emotions rush you into bad decisions about inspections or finances. Things could be changing soon in favor of the buyer.
The FHA, Federal Housing Administration, has begun to put in place stricter standards for letting first-time and low to middle income home buyers.
As pointed out by this usatoday.com article, currently the vast majority of FHA loans are being processed through an automated system with the minority being manually reviewed by lenders. In 2016, the FHA removed their policy that caused applicants with a credit score under 620 and a debt-to-income ratio of 43%. This caused the average credit score of applicants to be much lower by 2019 after those changes.
As a result, new standards will be enacted that will cause FHA loan applicants to undergo a much more intense process of loan application. This is speculated to reduce the amount of these risky loans by 50,000 cases.
To find a real estate agent who understands these issues, and who is a fit for your family, go to LDSAgents.com!
Many who hear the term “Reverse Mortgage” begin to immediately list off reason after reason why they are a bad idea. In a video by Professor Chris Mayer, many of the reasons that one might scoff at reverse mortgages are put at ease. Mayer’s experience in the area comes from being a professor of real estate at Columbia Business School. He is not the only one to claim the relevance of reverse mortgages. A task force at a Boston College have stated the positive sides of reverse mortgages, expressing an increasing comfort with the loan. As a extra sign of legitimacy, the Financial Industry Regularity Authority, has removed their warnings against reverse mortgages as a “last resort.”
Many believe that reverse mortgage are too risky for seniors to attempt, when there are other potential risks to their well being. Others find it that it could be taking advantage of the elderly and could cause financial burdens that could otherwise be avoided. Since the market crash in 2008, many steps have been taken to avoid the loss of money from reverse mortgages. Certain companies now require third party consultation before allowing potential reverse mortgagers to take to partake in this loan. Overall, the process of receiving a reverse mortgage has become a much more viable and encouraged option to those are taking the proper precautions. Bloomberg discusses Mayer’s ideas in this recent article.
You can find the best agent for you and your family at ldsagents.com.
It’s worthy to note that in January 2019 we’ve seen the largest sales decline in five straight years. While people are looking for homes and interested in making the investment, high mortgage rates and a lack of inventory are making it increasingly difficult for people to commit to a home purchase. Current home owners have been reluctant to sell because of the rates they would have to pay on a new home and those that own homes they could sell opt to rent instead.
Not only are we seeing the rise of mortgage rates but inflation is also a concern for many buyers in the market. While the mortgage and inflation rates have risen this hasn’t stopped the sales prices from rising as well. This incongruity begs the question “how much longer can it last?”
Anyone who has tried to either buy or sell a house during the winter season knows that it isn’t the easiest time of year to find success. Here are three reasons you might want to reconsider before you stop trying in this season.
There are many amazing TV shows that really know how to get us excited to take on a good old fixer-upper project. Taking something old and broken, and turning it into something beautiful and renewed seems like a dream project with the potential to earn some extra cash! But do the TV shows show us everything involved?
Often, the parts left out from all of the smiles and laughter are the harder realities of how difficult and how big of an undertaking flipping a house can really be. Read through our article Flippin’ A House Isn’t Easy to see if you are prepared to make the flip from start to finish!
When it’s time to start looking for your next home to move into, or your next home to flip, go to LDSAgents.com to find the best realtor with your same values.
With fall here and winter on its way, getting your yard ready for the elements is a must! Take a look at a 10 ways that you can prepare your lawn for the winter months ahead by clicking on our Fall Lawn Care Checklist. Lawn care is never old and this article is still full of gold for fall lawn care.
Whether you are longing for a new house surrounded by trees, or want a new house that doesn’t have any trees at all to clean up, LDSAgents.com can help you find an LDS real estate agent with your values!