Tips for Homeowners and Buyers to Protect Themselves
The first signs of the impending real estate crash were noticed in 2005. In 2007, the market began to tumble and since that time literally thousands of brokers and bankers involved in the mortgage industry have gone out of business. Despite the dire conditions of 2007; however, signs indicate that the national market could fare even worse during 2008. Many experts in the industry are specifically concerned that the number of home foreclosures will rise dramatically and commercial real estate will become pinched even worse than in the preceding months. While this news is certainly disturbing, it is important for homeowners as well as home buyers to understand that there are steps they can take to help protect themselves from the impending real estate crash in 2008. First, make sure you understand exactly what kind of mortgage loan you have and the implications of your mortgage type.
While adjustable rate mortgages were certainly attractive a few years ago because they allowed homeowners the benefit of lower interest rates, today they are a disaster waiting to happen. If you have an adjustable rate mortgage, it is essential that you consider obtaining a fixed rate mortgage. If you have your house on the market and are experiencing difficulty selling it, as is the case with many sellers, recognize the fact that you may need to make some concessions on the terms and/or the selling price. The market is rife with inventory right now and buyers are able to choose what they want and on their own terms. If you want to be one of the sellers that is successful in selling their home, you will need to lower the price and possibly even toss in a few extras to move your house off the market.
If you cannot lower the price, think about whether you might be better off financially to rent the home over the course of the next two to three years. The impending real estate crash will also most certainly impact prospective buyers as well. While there is a tremendous amount of inventory currently available and prices are lower than they have been in several years, it certainly appears as though there will be even more price reductions throughout the remainder of 2008. In some areas, prices could go drastically lower. This means that if you can wait awhile longer to buy a home you may be able to take advantage of even lower prices. As a buyer, you also need to make sure you give careful thought and consideration to the type of mortgage loan you take out to ensure you do not become caught up in the real estate crash. If you are a first-time homebuyer and/or you have a credit rating that is less than favorable, it is a good idea to consider taking out a FHA mortgage. If you are a veteran, a VA mortgage is also a good option. Both of these types of mortgage products offer terms that can be more attractive in the current market than other types of mortgage products. Keep in mind that while there are still numerous ‘no cost’ mortgage loans being advertised, it is imperative that you research such mortgage offers carefully before you try to take advantage of one.
In most cases, there is really no such thing as a ‘no cost’ loan. The costs are usually added back into the mortgage and that means you will be paying them off at a greater cost over the term of your loan. Word Count 592 PPPPP .
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