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The mortgage market!
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by: Dave Saltonstall
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Word Count: 354
The outlook for 2009’s housing market is filled with many dark stormy clouds, but a few rays of light are starting to show. The crisis that started in the sub-prime mortgage market has expanded to the entire financial and housing sectors. Problems exist, and bad economic data abounds, but there are reasons to have optimism about the housing market moving forward.
The first benefit is the speculators are gone. No longer are school teachers making deposits on beachfront condos they can never hope to afford. These make a deposit and flip before completion speculators are gone. The chaos in the banking sector has dried up money for these people to borrow. In the current market, and for the foreseeable future, all borrowers will have to have high credit scores, provide data, and prove they can afford their purchase. Those who qualify will find many bargains in the mortgage and housing markets.
The fed discount rate is so low it is effectively zero for the time being. This has helped make lending profitable for banks, however, some remain reluctant to lend and others are still unable because of balance sheet issues. If your bank falls into this situation, a good mortgage broker will still have lenders available to those who qualify. Those qualified borrowers will receive very reasonable rates, near historic lows. As for housing prices, fewer new homes are being built.
Economists say this drop is new home construction will help to stabilize prices and make buyers more confident. The foreclosure crisis has also created many bargains in bank owned real estate. A good real estate agent, with knowledge of the market, will help smooth out any bumps that develop.
Any housing purchase should be closely scrutinised. Many people are out to sell property fast however, buying a foreclosed property requires the most scrutiny of all. Title insurance is a necessity on a foreclosed property purchase. If you can’t get title insurance on the property, don’t buy it. Open eyes and common sense will prevent your new dream home from becoming a future housing nightmare.
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