Does The Housing Market News Make You Fear Buying A Home?
Posted: under Home Buying, Real Estate.
Tags: Buying A Home, Foreclosure, National Association of Realtors, Real Estate, Realestatesearchdirect.com
- Image via Wikipedia
Have recent reports on the housing market scared you away from buying a home? If so, you aren’t alone. Many people are looking at the current housing crisis as if it was Armageddon.
The Chinese have a word for crisis – weiji. The two characters taken separately mean danger and opportunity respectively. Opportunity can be found in crisis.
Imagine for a minute another home buyer. He bought his home at the height of the frenzy when banks were lending to anybody with a pulse. He knew he didn’t get the best mortgage. The rate would adjust in 3 years, and then the payments would be hard to keep up.
He expected the value of his home to increase as prices had been doing for the past few years, so he planned to re-finance when the loan-to-value (LTV) of his home increased enough to qualify for a better mortgage.
When the credit crisis hit, the home buyer saw the value of his house plummet, but he still had the adjustable rate mortgage. Three years after he bought his house his payments started to increase. He could no longer afford to make his payments. Do you think this is an unusual situation?
Comments (1)
Jan 08 2009
