Georgia Mortgage Blog

Its hard to sit back and say that now is not a good time to buy a house if you are capable. However there are so many fear factors about our economy and employment, that it is understandable to be worried and even hesistant to move forward in the home buying process. We are still in the midst of a recession, which investors and the government would like to gloss over, and unemployment in our nation is still over or at 10%. Both are large factors when an individual considers moving up into the ranks of home ownership. Yet, at the same time, there are also many positives for potential home owners that need to be considered before shutting the door on the idea.

Yes, the housing market and home values are down compared to 5 years ago. We have seen housing markets have declines in home values across our nation. We have seen new home construction come to a screeching halt in many markets. Foreclosures and short sales have been on the rise over the last 18 months. Builders have lost large sums of money and in many cases have lost there businesses completely due to changes in our lending markets. But let's consider this. Right now is a great time to find an affordable home at below market value. Also, if you review the trend of the housing market over the last 50 years, you will see that the bubble on value has burst before. You will also see that it has always come back. On average, housing values have annually risen at close to 3%. In other words, the real estate market tends to fluctuate much like the stock market. In the end it has risen over time.

The lending world has been turned on its ear. The old saying of "if you have a pulse, you can get a loan" has been changed to "you better have good credit and I better be able to prove everything on paper." Many people feel like the stiffer lending guidelines will make it impossible for them to qualify for a home loan. They also think if they are not capable of a large, 20%, down payment they could never get approved for a home loan. These things are not true. Yes, guidelines have changed and they have changed for the better. Gone are the days when a person could get into a home that they simply cannot afford. this is a positive change and we need to see it as such. There are still programs available for home buyers with little to no assets that make it possible to purchase homes they can afford with little to no downpayment. And, it should not be viewed as a negative for home buyers to make a downpayment on their purchase if required or desired. Investing into your home is a positive. Your home helps you build wealth over time, and I can't ever see that as a bad move.

With the lending side of things in mind, rates are of course one of the most talked about aspects. That is with good reason. They are at all time lows, still. If you are able to get a fixed rate in the 5% range or even in the 4% range, that is incredible and should be viewed as such. It will not last forever. As our economy grows out of its current slump, inflation will set in. With that, rates will rise. It is only a matter of time. The magic questions is when. If you feel like they will last much longer, keep in mind that our government has been helping keep them down over the last year or so by buying mortgage back securities. They have annouced this will end. And, if you have heard anything lately about the state of our governments pocket books, you could understand that it has to end. But, they have managed to keep the rates artificially low and it is up to the consumers to take advantage of it while they still can.

What about the "free" money the government is handing out right now for home buyers. It is a tax credit and not a straight check, but for many it equals a large return when their taxes are filed. It has also been widen to include previous home owners and not just first time home buyers. This program will also end soon. Again, the government will have to end it soon due to the fiscal responsibilities it has for the nation as a whole. So if the money is there now, much like the low rates, it is up to consumers to take advantage of it while it lasts. All good things do come to an end.

The fears consumers face when considering the economy and the state of our unemployment rate is understandable. The idea of continuing to rent and using that as the main reason behind it is not. To live anywhere, unless you own it outright, is going to cost you on a monthly basis in either rent or a mortgage payment. How you use your money to work for you is completely in your hands. There are many cases where a mortgage payment on a modest home can be less than the rent payment you are currently making. Take time to consider home ownership before letting fear keep you out of the one American dream all people are able to attain. Speak to a mortgage professional and find out if you are able to start down the home ownership path. The answers may surprise you.

Brought to you by the Tallman/Bland Mortgage Team at Mortgage Solutions of Georgia, LLC.

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