Michael Stephan

I recently responded to a blog asserting that the best time to buy a home is now.

We've all heard that mantra from countless salepeople, so it should come as no surprise.

However, my feeling is that the best time (recently) to buy and hold was a about 5 years ago

when rates were much lower, and before housing prices peaked.

If you had taken out a 15 years fixed mortgage, you'd only have 10 years left to go -

but a15-year fixed would have cut into your buying power, and you would have had to buy a smaller

home... Were too many people guilty of S_T_R_E_T_C_H_I_N_G???

All comments welcome!

Cheers!

Hi All -

Question: What is your very favorite Fairfield Country Restaurant?

This can be anything Burger Joint, Pizza, Local Pub. I guess you could even say your Mom's house -

but only if she'd be willing to cook for all of us!

Let's see if we can get a really good thread going...

Please limit choices to Fairfield County.

Cheers, and Happy Labor Day Weekend!

- Michael

FICO - Fair Isaac Corp - Wants to Keep You in Debt!

Fair Isaac Corporation (FICO) builds credit models.

They analyze credit in 80 Countries (according to thie web site).

Fair Isaac Corp. designs the "credit models"

(inner workings) used by Trans Union, Experion & Equifax

If and when you payoff your mortgage your FICO scores will decline!

The caveat according to Trans Union is if you sell and then don't buy within within 90-120 days is when this occurs, sofairly quickly you are impacted. Likewise paying off your mortgage does the same thing - decreasing your score.

Trans Union (which uses a FICO model) is on record as having said that when people sell their homes, they will experience a 25-35 point drop in their credit (FICO) score because no mortgage appears on the credit bureau; however, when they purchase another home the score jumps up again.

Why am I not comforted? Instead of raising our scores as a reward for paying off huge mortgage debt, they slam us for not having a mortgage! If that isn't steering us into debt

This is just another dangerously small part of the puzzle that is gradually leading us toward a "cashless society" where all transactions will be controlled by the big banking machine.

Fair Isaac Corp. is located at 901 Marquette Avenue, Suite # 3200, Minneapolis, MN 55402-3232, Phone: (612) 758-5200 (Map)

Google Fair Isaac Corp for more info.

So, Have We Hit Bottom Yet? - - - don't bet on it!

As the local real estate and mortgage markets continue to work through price decline, here are my (now 7) reasons why we still dropping (as of Aug 26, 2008):

#1 Mortgage Lenders are lowering LTVs (loan-to-value) ratios. This obviously negative move will continue to erode housing prices as it further hand-cuffs already-cash-strapped-buyers and sellers to wait. What other choice is there, besides cash? Remember cash?

#2 Perhaps you or someone you know has received a letter freezing their Home Equity Line. If not, get ready, they're hitting mailboxes in our area.

#3 The monumental gap between debt-based dollars and their buying power relative to home prices - which, under the best of conditions leaves we the people at the mercy of flawed economic and banking systems - a frightening combination.

#4 Relative lack of Mortgage Lender competition - especially in Jumbo territory - over $1.5 million. Hence all sorts of Hard Money Lenders are rushing in offering seemingly easy solutions and bad deals.

#5 Total lack of alternatives.

#6 The Fixed Rate Jumbo Market is getting hammered. A 30-year Jumbo fixed rate loan is (as of 9/7/08 is 7.875% (by comparison a 5/1-ARM rate are hovering in the high 6.0%)

#6 As recently as not quite 8 weeks ago, a major "off shore, portfolio mortgage lender" stopped doing stated-income loans in our 50 states (and perhaps beyond).

Are we: see my (Homeowners" Investors? Suckers?) BLOG ((("Owning a home means having a mortgage, which means you really don't really own your home, outright? In addition, you need to have a mortgage balance that by 1960s standards is astronomical. In many cases the expensive home you've bought needed new kitchens and baths, meaning even greater debt / expense. Trust SMC - We understand.)))