Real Estate & Financing Update by Maurice

Rates are identical to last week with an overall flat bond market. I have attached the rates again just to be safe.

Two important items:

1) Time of Waiting after a short sale
2) Change in payment based on rates

The first item is clarification of the waiting period after a short sale. Attached is a clipping of the guideline for our main investor in regards to the time period. With a 20% down payment, only 2 years is required. With a 10% down payment, 3 years is required. With less than 10% down, 4 years is required. This is some great information for some client who may have gone through the unfortunate instance to have a short sale.

The next item on today’s agenda is the difference in rates. We have had a few clients lately talk about waiting to purchase until the Summer months. Interest rates will go up. Although no one knows exactly when, current rates are near their lowest levels ever. Once the job market shows 2 strong reports, I assure you rates will shoot substantially higher, often times within a week.

If a client purchases a home at $500,000 with 20% down and obtains a mortgage today at $400,000, the payment would be $2086 per month at a rate of 4.75%. If the same client waits and buys the identical homes in the summer and rates are at 5.5%, the payment is $2271 per month. An increase of $185 per month. Now, this number may not be a deal killer, but, I can assure you that is a lot of money to most families assuming no change to the price or loan amount.

Now is still a great time to buy with great rates and prices. Let me know if I can help you with any questions you may have.

As you set your goals this week, remember, ”you can never cross the ocean unless you have the courage to lose sight of the shore” (Christopher Columbus).

Have a great weekend.