Frequently I run into many of you that read this column, and I am asked if I am the one that writes it. The answer is YES! I do not cut and paste from any other source. I do my own research, and expose my own thoughts. Which by the way, to clarify, are not the thoughts of Patriot Bank Mortgage. Read at your own risk. Why does my opinion matter? It does not. But my goal each week is to provoke thought, and through that, understanding. I hope that by sticking together, and providing you , the real estate professional (most of my readers), insight that you can trickle into the community.
So you know what is coming next........my experience, and my insight. Emotioanl response (by the way) is EXACTLY how our economy is affected every single day. The 'emotions' of individuals and companies, and their buying behavior as the buy and sell stocks. Have you really sat down to think how much we rely on the stock market to identify our lives? Our well being? It is astounding. The S&P 500 has the most psychological power over people that I have ever seen. That and the news media. Which is another story. Don't get me started.
It is time to 'step up to the plate', fellow Houstonians. If we do not start believing in our economy, and start buying, we are succumbing to the hoopla of this whole entire mess we are in. Is there risk I could lose my job? Of course, always has been, and always will be. If I am living in my means, if I save, hopefully I will get through tough times. For those of us that are suffering, or facing foreclosure, I am truly saddened, and hope things go your way. But for those of us that are not, it is our RESPONSIBILITY to keep the economy going.
Interest Rates are LOW LOW LOW. There will never be a better time. If you sell low, chances are you will buy low too! So move past it! Are we all relying on values that maybe were never there anyway? Apolologies for upsetting anyone, but the market value of our homes is what buyers are willing to pay. And in today's market, it is maybe a little less than 1.5 years ago. But maybe it is time to upgrade to the house I have always wanted that is now priced where I can afford it! We have seen ups, and we have seen downs. Neither of these cycles will last forever.
Now some facts:
Rates are at record lows- 4.5%-4.75% on a good day (with a point, and excellent credit and 20% down!)Loan availability is shrinking due to credit scores: Get qualified early, and with a mortgage lender that can guide you on how to improve those scores before buying (like me for instance!). Let me elaborate on this by saying that if you do not have a 720, you will not get the best rate, and further more, if you do not have a 680, probably no loan at all unless you put 20% down. The credit scoring system is unfair and imperfect (regarding how it treats collections, for example), but it is what we have to deal with. So understanding is the key.
Appraisal changes are about to rock our worlds: As of May 1, mortgage companies have to outsource (if you are a broker) and centralize (if you are a direct lender, like us) the ordering of appraisals. The loan officer can not 'choose' its favorite appraiser anymore that will 'make value'. You very well may have a listing that has an appraiser that does not frequent the area. Sorry, its is the way it is going to be. Fannie Mae (and HUD) has determined that direct loan officer involvement has contributed to the over inflated values, and must be removed from the process.
There will be more mortgage company failures: with the shrinking of credit (for lenders) and increased foreclosures for lenders , there will be more consolidation. Example: CNN MONEY reported this morning that Thornburg Mortgage (THE TOP JUMBO LENDER) is about to file Chapter 11. Like Jumbo's needed more negative news. They already are at record highs (for the last 6 years). But for a million dollar mortgage, fixed for 30 years , for slightly under 7%, come on, are we that spoiled that we don't remember double digit interest rates? The trouble is , no, most buyers these days are too young to remember.
We will survive this! Its just another cycle.
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