Be Careful Of This Blast From The Past

Lately, The Holmquist Team members have been noticing some advertisements for mortgages that make us feel like we’re back in the early 2000s.  I’m referring to the so-called hybrid loans that promise a very low fixed mortgage rate for a few years, and then become an adjustable-rate mortgage.

Be careful. Don’t let a mortgage calculator lull you into a mistake.

If you’re considering buying a home, an adjustable mortgage might work for you or you may be better off with a fixed-rate mortgage, especially with rates as low as they are. The trap, for many people, is their credit score and the belief that they can buy cheap now and refinance or sell before the mortgage balloons. A Holmquist Team Realtor can help you avoid the trap.

Your house-hunt should begin at your dining room table with some planning and it shouldn’t be impacted be promises of extra-low interest rates. As in everything else, if it sounds too good to be true, it probably is.

There really hasn’t been a better time in a generation to buy a home if you can afford it. I know: Realtors say that all the time. But, with interest rates low and a good selection of homes, it’s very true. If you’re thinking about it, here’s how to plan it:

  • Start by looking at your financial situation, including your credit. Lending standards are high, these days. Get copies of your credit scores from the three reporting bureaus and make sure there are no errors or issues. Look at your own financial situation. How secure is your income? What can you afford? A financial planner or a Realtor can help you with this if you need it.
  • If you decide it’s time to be a homeowner, talk with a financial planner or a Realtor if you haven’t already.  They can help you determine whether you’ll qualify for a mortgage and help you figure out what you can afford. If you can’t qualify, don’t lose hope. Find out what needs to be fixed and spend the time you need fixing your credit, waiting until you’re earning more or doing what you have to do. Home ownership isn’t something to be rushed, and it simply isn’t for everyone. You may never recover if you get in over your head.
  • If you can qualify and you know what you can afford, shop around for a mortgage. Some experts suggest talking to three banks and three mortgage brokers. A Realtor can help you find banks and brokers with good programs. Look at interest rates, closing fees, other costs and programs. An adjustable might be right for you, but be careful and review all your options.
  • Once you’ve prequalified, work with a Realtor to find the home that’s closest to your dreams. You need to move carefully, but quickly.
  • A warning: Once you qualify for a mortgage, don’t do anything that will change your status. The most common mistake is to take on new debt. Avoid new credit cards, lines of credit, major purchases and be sure your bills are paid on time.

It is truly a great time to become a homeowner, but do it the right way. Plan it carefully and find a home where you and your family can comfortably grow, create memories and become part of a community while enjoying the financial and taxation benefits of home ownership.   Give us a call or shoot us an email today and we can show you why homeownership is such an integral part of our American Dream.

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2012 Could Be The Year You Buy or Sell a Home!

Will 2012 be the year we climb out of the real estate market ditch? Could this finally be the time to sell your home or buy a new one? Members of The Holmquist Team are hearing a lot of optimism out there.

Several economists and observers of homes for sale are sounding some cautiously optimistic notes. Even the jaded news media is beginning to sound optimistic. Amanda Gengler of CNN Money, even said, “If you’re gearing up to buy a home, 2012 will be a great year.”

Experts say home values are great

Experts are saying:

  • Housing prices, which are still falling, could stabilize by mid-2012.
  • The annual pace of home sales has already been heading up, and experts expect that trend to continue.
  • Home value, expressed as affordability, has reached record levels. Mortgage payments are now only 13 percent of family median income.

There is sound reasoning behind this. Jeff Otteau, aNew Jerseyappraiser who has earned a sterling reputation as an accurate observer and predictor ofNew Jersey’s housing markets, is among those dipping his toes in optimism. He points out:

  • Pending contract sales inNew Jerseyhave risen for six of the last seven months.
  • Consumer sentiment has been improving since summer.
  • Unsold inventory is down, especially in certain segments of the market.
  • Job creation is up, even inNew Jersey, although our state lags behind the rest of the nation.
  • There is a shortage of rental housing. That has two implications for home sales. First, it’s driving up the price of rentals, making buying a home more attractive. Second, expect new construction on multifamily homes, generating jobs and more money being spent with those supplying builders and renters.

Yes, this recovery, if it is one, is fragile. Yes, we still have a lot of foreclosures and short sales in the pipeline that have to work their way through the market. Yes, there are a lot of people in trouble with their homes.

Good time to list your home

Nevertheless, this information means that if you’ve been thinking about listing your home or looking for a new home, it could be a good time to do so. Demand has been building up, so these optimistic reports are liable to bring people and homes to the market.

Is the time right for you? That’s something you should discuss with your financial counselor and a Realtor. If you’re buying, you need to feel secure and somewhat stable with your financial situation, have the income to make a purchase and be realistic about what you want. If you’re selling, your home needs to be ready and, again, you need to be realistic about what you can get for your home.

The bottom line is that current tone of the experts – cautiously optimistic – means that if you’ve been waiting for the right time to sell or buy a home, that time is likely here. If members of the Holmquist Team can help you with your decision, please don’t hesitate to call us.