Monday, August 27, 2007
As we all know, things in the world of finance are unstable at best at this juncture. Many people are wondering, whether they are thinking of buying a home or selling, how they will be personally affected by the recent changes. They are also wondering how their local market will be affected. My local market is San Francisco, so all of my thoughts and professional opinions are based on the market here. It seems that the interest rate for jumbo loans has settled after a recent jump, so hopefully that will help settle some of your nerves. To read the newspaper or watch the six o'clock news on television, you may start to think the world is going to end (I always do). On the other hand, listen to a lender or a real estate agent, and they will tell you, "Don't worry, now's a great time to buy a home!" The truth is, for a lender or real estate agent, anytime is a great time to buy a home. You need to figure out if or how you are personally affected by the recent changes. If you are a buyer you will need to get preapproved by a bank. Even if you were preapproved before the recent credit crunch, you need to visit your lender again. The restrictions have changed. For example, you can no longer buy with no money down. Good credit and a minimum of 10% down is what you need to purchase a home right now. If you have that you can get a great loan from a great lending institution. If you are a seller, you need to look closely into your buyer's preapproval. Are they fully preapproved and by which lender? That has been one way people have been affected directly; as lenders go bankrupt they have pulled out of loans at the last minute; a buyer is left without their home and a seller is left without a buyer. In some cases the buyer is able to quickly find another lender. The point is, you need to find out how the recent changes will affect you and go from there. Getting preapproved is more important than ever, and if you are a well qualified buyer, you have better leverage now than you have had in years.