- With all the confusion and uncertainty in the marketplace regarding the health of our credit markets, lenders are open for business and have money to lend. I am sure you have heard about Washington Mutual failing and Wachovia being over by Citigroup. Please understand that these banks along with Countrywide (who had their money problems last September) were the ones who were big players in the “pick-a-pay” option-arm loans that had negative amortization. These were high-risk loans that borrowers could get without providing much, if any, documentation (also known as subprime). These higher risk loans are dragging these banks under.
- There are many banks out there who were more conservative in their lending practices that are still here and ready to lend money. Also, now that Fannie Mae and Freddie Mac have settled down, they are performing as they were originally chartered to do, by providing money for banks to lend to consumers. We should expect a little more tightening in guidelines going forward as all of this plays out, but if you have a job, can prove your income, have some money for a down payment (as little as 3%), and fair credit, you can still get a loan.
So what does this mean for you and your neighbors.........pricing has dropped significantly and this is a great time to buy!! Interest rates, believe it or not, are still great. If you do not have a conventional fixed rate mortgage this may just be the time to refinance. If you are thinking of purchasing an investment property or second home, this is a great time to do so. First time homebuyers, college age kids needing a temporary home, want that beach front condo that used to be too expensive to save for retirement......now is the time to really consider making these purchases. There are great deals to be had. Remember we never know when the bottom has really been hit until we are on the other side going back up!
Seize the Day!