Is it time for you to buy a home?
That's a pretty personal question for first-time homebuyers.
Just last week, I met with a new buyer for her loan application. She reminded me that she'd been in the market for a home for 2 (yes, that's two!) years!
Upon hearing this, I asked her ... "Why now? What changed for you? What made you think your ducks were all in a row?"
Her reply was, "I'm in a good place at my job now. I have my down payment saved-up. You and I worked on my credit and it's strong. And the timing is good ... I just didn't want to miss out on the advantages of buying my home in this market."
She went on to reveal that when she started her journey to buying a home two years ago, we had projected a good monthly payment for her at almost $200 HIGHER than the monthly payment she's going to have with her home purchase now. $200.00!! Quite a savings ...
Well, I went away from that evening's application feeling pretty good. It was obvious to me ... this client had her act together financially. She had paid attention to my advice and all the news regarding housing, mortgages, and ownership. And she had come to the right conclusion ...
Home buying and financing come with risks and responsibilities ...
She had then set-out to repair her credit and prepare herself financially for purchasing a home intelligently and systematically. No immediate gratification. The longer, more financially sound and beneficial route was the wise route she chose.
At the end of that route, all her ducks were in a row.
Right now, we're seeing that low interest rates are not luring buyers in as they would have in the past. Low housing prices aren't doing it. And it's just my guess that the glut of bank-owned homes, previously foreclosed on properties finding their way onto the market, won't be appealing enough to lure them in either. Not on their own.
So, what changes have been made that might make an impact on the future market?
Fannie Mae's recently implemented condition ratings for appraisals should elevate some of the issues regarding bank-owned properties. Under these new changes, banks and asset management companies looking to sell Real Estate Owned (REO's) have to bring all properties for sale up to a C3 status. (C3 =The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained.)
These changes should provide some much-needed help to keep housing inventory at an acceptable level to buyers, lenders, appraisers, underwriters, and realtors alike. It should also keep property values up, eliminate the guess work by appraisers as to if ... and when ... or how much ... the condition adjustments for properties should be.
Perhaps if home buyers then like what they're seeing for sale in the future REO market ... and individual sellers aren't hurt by the lower-end sales of "disposed of" properties ... the market will get moving again. Sales and Closings will not be torpedoed because of appraisal value issues.
But I think, even if all these recent and upcoming changes make a positive impact on the market, theyshould NOT be the sole determination or bottom line for buyers deciding whether to enter the housing market ot not.
Nope! I say that final decision should be made when a home buyer can personally answer my question asked above in the exact same manner as my client did ...
"All my ducks are in a row ...*employment, *credit, *down payment, *interest rates, *monthly payment, *right house ... and I'm willing to be a responsible homeowner."
Absolutely the best answer for everyone ...
* Need some assistance and guidance in getting your ducks in a row? Worked hard and accomplished that already? Looking for advice or informational seminars? Whether you're looking for some credit guidance, just want to polish your credit a bit, or are ready to buy ... with over 35 years of experience, I can help!
