Homebuyers are Benefiting from Home Foreclosures
Mortgage Credit Problems Columnist
I think we all agree that home foreclosures are tragic and no one wants
to see someone lose their home because they are unable to pay their mortgage.
However, just as in nature, tragedy often leads to opportunity. Find out how
new home buyers are benefiting from the high home foreclosure rate.
In many part of the country, home foreclosures are causing mortgage mayhem
and lowering home values drastically. People who paid top dollar two years
ago have seen depreciation of their home's value up to 30% or more. In San
Diego, homes that sold for $450,000 a year ago are now going for $300,000--quite
a savings for a new home buyer trying to get into the housing market and a
great opportunity for people who were unable to afford homes a year or so ago.
However, is now the right time to buy? How do borrowers avoid getting into the
same mortgage trap that has led to so many home foreclosures?
Being smart about your new home loan can help you avoid a bank
foreclosure on your property. With interest rates still at historic lows,
now is the time to purchase a home and to secure it with a low risk mortgage.
Conforming and government backed mortgage rates today are about 6% which is
great for new home owners. While jumbo loans (those over $417,000) are more
costly, a conservative jumbo loan is still easier to qualify for and is more "foreclosure"
proof than higher risk mortgages such as option ARMs and variable rate interest
mortgages.
If you were unable to buy a home in
the last few years, you may find that you can now. Talk to a licensed loan
officer and real estate agent today to see if you can't qualify for your new
home.
About the Author
Sheryl
Landrum is a Senior Loan Officer with First Capital Mortgage in San Diego,
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