Home Buying: Refinance or Buy New?
There seems to be a crossroads that many homeowners reach after being in a home a few years: should you refinance your current mortgage or buy a new home?
If you feel your current home will serve your needs for at least 3 more years, stay put. If your financial situation needs some work, consider a refinance. It's especially important to refinance before you miss any payments or have a significant change in income or credit. A cash-out refinance which consolidates all your debt into your mortgage could free up a lot of cash. Ask a mortgage professional about interest-only loans. You can weather a financial storm with an interest-only mortgage and pay on the principal when you’ve got the available money.
If you anticipate any significant events in the next 3-5 years, think about the kind of home you’ll need. Do you need to downsize or upgrade? Tired of climbing the stairs in your 2-story home? Consider a ranch-style home.
This common question can be answered by assessing your goals and if your home fits in with them. After you do that, it will be much easier to determine if you should refinance or buy a new home.
Home Buyer Incentives? Doesn't Hurt to Ask
In a seller's market, a prospective home buyer needs to be a little more cautious when negotiating a purchase; however, in today's buyer's market, incentives are an accepted part of the deal. It certainly never hurts to ask for incentives, but be careful not to get carried away to the point of alienating the seller totally to the point they are willing to even negotiate.
It's not uncommon for a seller to wait for three months or longer to sell their home, especially during this time when the market is saturated with homes for sale. They need to make their home stand out amongst the rest, and often times, offering sales incentives is the easiest way to accomplish this.
When purchasing a new home from a builder, the incentives can be almost endless, and range from new appliances, landscaping, big screen TV's and even swimming pools.
This buyer's market won't be here forever. Right now, if you're a buyer, you've got an edge; be sure to take advantage of it.
Buying After The Sub-Prime Crunch
The days of getting a quick easy mortgage are clearly over. A year ago, mortgage money was flowing. Predatory lenders signed people up for mortgages without paperwork, gave out loans that covered 100% of the home's value and weighed them down with outrageous payments that exceeded their income. The subsequent fallout from those loan practices has been tremendous, leaving lenders scrambling to clean up a mess of foreclosures and defaults.
They've also tightened the purse strings - especially when it comes to the subprime market. Lenders are demanding documentation, downpayments and turning back to more traditional methods of qualifying loans. Those with a long history of paying bills on time won't be affected, but first time buyers or buyers with spotty credit histories need to get their paperwork in order.
Here are 5 ways to make buying after the sub-prime crunch a reality:
- Find a banker or mortgage broker you can trust.
- Improve your credit rating: even if you're a year or more away from making a purchase, it's never too early to start.
- Clean up your credit report: take care of any problems or errors on your report.
- Educate yourself: learn the terms and take time to build your team of experts.
- Work with a real estate professional: a good real estate professional will always save you time and money in a real estate transaction versus going it alone.
Buying a home will probably be the single biggest financial investment you'll ever make but it doesn't have to be the biggest risk you ever take. With the right real estate agent, financing, information, and financial management, you will be on the path to a future that includes home ownership.
Should You Freeze Your Credit?
Finally, anyone in the U.S. can freeze his or credit report to make it a lot tougher for an identity thief to ge a loan or open a credit account in your name. The question is, should you?
We'd love to hear your thoughts on this subject. Just use the "Comments" link below.
A Little Good News About Myrtle Beach Area Real Estate?
It seems there's nothing but bad news for the housing market every day: More mortgage resets are ahead in the next year, lenders are tightening standards and homes continue to pour onto the market. All point to home values continuing to move lower in the near future. There are plenty of statistics to warrant a gloomy outlook.
The National Association of Realtors says existing single-family home sales dropped 8.6 percent to a seasonally adjusted annual rate of 4.38 million in September, compared to a pace of 4.79 million in August. That rate is 19.8 percent below the 5.46 million-unit pace from September a year ago. What's more, the median existing single-family home price was $210,200 in September, down 4.9 percent from the same time last year.
But there are also some encouraging signs. Lawrence Yun, chief economist for the National Association of Realtors (NAR) believes home values may start recovering next year because significant demand has been accumulating. He says prices actually continue to trend upward in the Northeast, Midwest, throughout the condo sector and in areas that are not dependent on jumbo loans.
Moody's Economy.com economist Patrick McPherron isn't so confident about a fast housing recovery and anticipates the market staying down at least through 2008. He says that a weakening in the economy and financial markets, combined with higher guidelines for mortgage lending, will drive down demand.
It all seems to depend on who you talk to, or listen to, as to just how bad the country's real estate markets really are.
What do you think? Do you think things are beginning to show signs of turning around? Or do you think we'd all be advised to hunker down for the long haul? We'd love to hear your comments by using the "Comment" link below. Your name and email address are required to post your comment, but know we respect your privacy and your email address will NOT BE PUBLISHED here for anyone else to see or harvest.. so go ahead and tell us what you think.
