Discussion in 'Black Money Business Jobs' started by panafrica, Mar 1, 2006.
Brother Pan I am glad you posted this article. This decline in real estate is why I think it is a great time for people who are living transtionally to buy a home. Sellers will reduce the prices of homes and will be willing to pay closing costs (My Seller reduced the price by 4ooo and paid about 4000 in closing costs when I purchased my home from the shelter).
I really think it is a good time for the poor to get an asset.
That's absolutely correct, this is a good time to look into buying property!
Pan and Maniasc, don't you think that one reason why foreclosures are rising is because some people purchase the "maximum" amount of house they are told they can afford which they often don't realize is only the price of the mortgage loan? Then when they get into the house they go, "Ut oh, now how are we going to pay the taxes and insurance and monthly living expenses?"
Regardless of what a real estate agent or banker tells you what you can afford, you don't have to purchase a house at that amount. Consider looking for a bargain at a lower price and just as much house as a more expensive one. They are out there. Leave some breathing room in your budget so that you can buy a house and still be able to eat, have heat and be prepared for emergencies without pulling out a credit card.
Develop a "spending plan" BEFORE you start looking to buy a house.
NNQueen, you are so correct. I am a Licensed Mortgage Broker/and Real Estate Paralegal/and invest property owner/Landlord.
I talk to people every day and counsel them on how much of a house they can afford depending on several factors to include income. There are a lot of people out there that get themselves into situations they have no idea how problematic it will be in the long run.
People need to read and ask questions, and understand that purchasing a home is a great undertaking and should not be taken lightly. I have had to tell hundreds of people that the house they want do not support there income, debts, liabilities and have them cry and tell me how they can do it anyway. I have begged and pleaded and refused to do the deal in almost all cases. I couldn't sleep with myself knowing that I put someone in a situation where I know they will fail.
Sister you are to be commended for your compassion and integrity!!
In my area properties have risen 22.9 percent in the last 6 months.
California is terriable they want $400,000 for crack houses
It's only a good time if you can qualify for a decent, fixed loan program. Otherwise, the long term finace costs of many adjustable rate programs are not worth it. Why?
Because new housing starts are slowing which means that many markets are witnessing depreciating market values in their local markets which mens that lenders are raisng mortgage rates and home appreciation values result in consumers paying higher interest while their HOME EQUITY is either declining or increasing at slower rates.
I find this article interesting and thank you for posting. I have had a lot of folks criticize my moving rom los angeles for a number of reasons but the move is paying off because I timed the market, was able to pick up a piece of property which has increased in value by 1/3 in the first 6 months, while unloading a ridiculously over-valued condowhile keeping my costs down to the point of paying paying capital gaints tax less than 3k, and getting creditfor the mortgage deduction on two homes +point+property tax..
Key to this is buying out of a declining market and into a market that is appreciating.
So the point is, buying at this point is only beneficial if it leads to BUILDING EQUITY, otherwise home buying and ownership can become more of a liability than an asset...with rising home energy, homeowner's insurage, title fees and property tax increases, one man's asset is another man's liability.
A principal reason for the rise in foreclosure rates has to do with overall market decline in the housing and construction industries, rising adjustable mortgage rates, and people often overprice themselves and their home equity values are not appreciating at a pace higher than increased costs. A lot dont pay their taxes and insurance along with their mortgage (via escrow) then are unable to pay when thos bills become due. Failure to pay property tax results in tax lein, and the costs involve oftentimes leads to forclosure and state lein or tax sale, while the consumer is now out home with their credit ruined.
its a vicious cycle.
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