The divorce between foreclosures and interest rates!
Mortgage rates are going up! Hurry! Refinance Now or Lose Out! If you are thinking about buying a new home - this is the time!
Really!!!!
Repercussions for the man or woman in the business of buying and selling foreclosures? Rates are up, nobody will be afford to buy a house anymore at an affordable rate and pretty soon we will become a nation of renters?
I think NOT!
The typical family today spends just 19 percent of household income on mortgage payments. That compares with 22 percent in 1990 and 31 percent in 1980 -- when mortgage rates averaged nearly 14 percent.
Then combine this with the fact that 10-15 years ago the options available to a regular family looking to buy their first home were a 30 year mortgage, 15 year mortgage and that is it. If there were some exotic mortgage solutions available, rest assured that majority of loan officers had no clue about them.
How times have changed in the last 3-4 years is simply amazing! The 30 year (FHA and conforming) is still around but there are a slew of attractive options to consider when you are selling a house to the first time home buyer market.
FHA has several Adjustable Rate Mortgages such as 2/1 Buydown program which is simply incredible toward creating a low low payment. So that pretty much takes care of everybody with the bruised credit. Then if your buyer has good credit then you have every single bank offering 1 year, 3 year, 5 year adjustables that help you make your house payment (the price you want to sell is irrelevant!) stands out from all the other houses for sale in the area.
The rates for the 30 year mortgage can go up but the rates for the adjustable rates mortgages are typically very stable and that is where real estate investors especially the ones who are in the business of buying and selling bank owned foreclosures should be looking into.
The other extension of this trend is that if you are holding into a property and thinking about executing a lease option on it - hey why give banks all your money , get a adjustable rate mortgage and maximize your monthly cash flow. Plus if your credit profile is strong enough to get a interest only adustable then 100% of all your payment is interest and by extension deductible . Exceptions may apply because of your unique income or other issues so make sure to check with your tax accountant on your own unique situation.