Time Is Of The Essence - Now More Than Ever...
As many of you already know, the lending industry has undergone an unprecedented credit crisis. This crisis began in the so-called "subprime" lending markets and now has had it's effect on all of the credit markets.
What does this mean to you and the real estate market as a whole?
- Sellers can no longer be reluctant to accept offers or reduce prices. Tightening credit guidelines and diminishing mortgage products will continue to reduce the pool of qualified buyers. This, in addition to an increasing national inventory of homes for sale, means that now is not the time to try and hold out for the "best" price possible.
- Buyers with credit issues or difficulty in providing required documentation can no longer sit on the fence. If market conditions change, buyers who qualify for a loan today, may not qualify for the same exact loan, tommorrow. Already, the majority of lenders have stopped offering no-doc loans and many have re-written much more stringent guidelines, on their stated loans.
- Subprime and Alt-A refinance candidates, especially those who are in ARM's that will adjust within the next 12 months need to act now - even if they have a pre-payment penalty. Borrowers that are struggling to make their monthly payments now, can be put into financial shock, once they realize that their mortgage payment can as much as double, once their ARM starts adjusting.
Clearly, with the amount of lenders that have closed their doors in the last few months, the recent credit issues are going to have a profound effect on the real estate and mortgage market, for some time to come.
However, even with all of the lenders that have closed their doors, there is still plenty of credit and financing available to those that are willing to realize the situation and act now.
Furthermore, there is still a large population of willing and able buyers who are actively searching for that "perfect" property.
30-Year AND 15-Year Fixed Rate Mortgage At Lowest Level Since Spring 2004!
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.48 percent with an average 0.4 point for the week ending January 24, 2008, down from last week when it averaged 5.69 percent as well. Last year at this time, the 30-year FRM averaged 6.25 percent. The 30-year FRM has not been lower since the week ending March 25, 2004 when it averaged 5.40 percent.
(Source Freddie Mac 01/24/08)
BUSH SIGNS BILL TO OFFER TAX BREAK FOR MORTGAGE FORGIVENESS
President Bush signed a measure in to law Dec. 20 offering homeowners tax breaks on forgiven debt on mortgage refinances or foreclosure work-out programs dispersed from Jan. 2007 through Dec. 31. With the passage of the Mortgage Forgiveness Debt Relief Act of 2007, eligible taxpayers do not have to pay federal income tax on debt forgiven for loans secured by a qualified principal residence.
(Source C.A.R Newsline 12/26/07)
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