Foreclosures Bring Market to Near Standstill
March wasn’t a good month for home sales, as they posted one of the largest drops in nearly 18 years. The cause of this drop is a recent issue dealing with failed mortgage deals, as more Americans struggled to keep their home out of foreclosure.
Economists and real estate experts are concerned about the near future of the housing market, although they clearly see the cause for the sharp drop in house prices. Mortgage lenders were offering tough rates to potential lenders, but they were lowering standards on who could qualify for such a loan. This attempt by lenders to increase sales at the inflated interest rate backfired, as many of these under qualified home buyers couldn’t foot the bill for their rising mortgage cost. As interest rates rose slowly last year, more people saw their newly purchased home head into foreclosure.
That trend, coupled with the fact that interest rates are still pretty high, has combined to produce a scared real estate market at this time. People are scared to pour their money into homes for fear that rising home interest rates could force them into the unenviable position of foreclosure. Economists predict that the real estate market should see an upswing of some kind in the coming months, though.
Seeing the error of their ways, the majority of mortgage lenders have revamped their system for deciding who qualifies and who does not. In order to get a home loan today, you better have good credit to go along with a good reputation. These tightened standards should help the market to recover, although it’s got a long way to go after the largest drop in nearly two decades.
This trend does present a good opportunity for qualified home buyers to get a good deal on a nice home. Prices are at a low point and with real estate companies worried about a continued slump; they should stay low for some time to come. Potential home buyers need not fear if they are the kind of buyer with good credit and a solid history. Mortgage interest rates aren’t likely to spike to a point where these borrowers would be in danger of foreclosure.
There are certain things that potential borrowers need to keep in mind when securing that loan, though. For one, they should be sure to not overextend themselves. It’s important to stay within one’s means when purchasing a home. Though the mortgage payments may not seem like much when signing that loan, they will hit home when the monthly bill comes calling.
Home buyers should also finance their mortgage with a respected lender that’s not likely to pull any funny business. The nation’s top banks have locked in rates that home buyers can take advantage of. Doing so will give the borrower a good idea of what the rate will be for years to come.
Following these tips will enable home buyers to own a nice home in a market that’s nearing stability. Though it will take the market a while to fully recover, it’s about to be on the way back up.