Given the current economic crisis -- which appears to be growing global in scope -- has made buying real estate more difficult. Credit is tough to come by, and these days you need a job to buy a house. That is, unless you are in a significant cash position, which doesn't describe most Texans. Most of us need credit, and are having diffculty obtaining it.
The credit crisis continues to grow, and uncertainty looms large. Third quarter 401(k), 457, 403(b) and IRAs have dropped. Savings rates have dropped. Gas prices remain high, and wages low.
With the central banks around the world working in concert to lower interest rates, crashing stock markets in the U.S., Europe & Asia, rising unemployment, a dwindling Peso and a hotly-contested and increasingly-ugly U.S. presidential election, even the most optimistic real estate agents and mortgage brokers are getting nervous.
They say that all real estate (like all politics) is local. So...how does the national/global crisis effect San Antonio homeowners or home buyers? As the U.S. economy falls into a recession, jobless numbers have increased and more than 750,000 American jobs have been lost this year. According to the US Dept. of Labor (Bureau of Labor Statistics) as of the end of September 2008, the national unemployment rate was officially 6.1 percent. The number of unemployed persons is 9.5 million, and over the past 12 months, the number of unemployed persons has increased by 2.2 mil-
lion and the unemployment rate has risen by 1.4 percentage points. Some unemployment experts have sugggested that the true rate of unemployment in the U.S.-- if you factor in those making less money than they were two years ago or working at part-time jobs rather than full-time jobs because they can't find the right situation, those who are underemployed, and those who have just given up looking for a job and have fallen off the rolls -- is approaching 10 percent.
There is a strong nexus between rising unemployment and a faltering real estate market because most lenders will not issue a mortgage loan, unless the borrower can demostrate sufficient incme to make the payments. These days, the income won't come from the stock market or from "flipping." As such, jobs are virtually essential for obtaining a mortgage loan.
In Texas, almost 600,000 people, or 5.0% of the workforce was unemployed in August. This was up from 4.7% in July and 4.1% in April. In San Antonio -- which many claim has been insulated from the housing crisis -- new and existing homes sales have dropped. San Antonio builders started construction on 33 percent fewer homes this (3rd) quarter than they did during the same period last year. Sales of new homes in San Antonio are down 36 percent from last year.
The credit squeeze has reminded banks and mortgage lenders that, while credit scores are perhaps decent indicators of whether a borrower has financial stability, they don't make the mortgage payments. Similarly, FICO scores don't take into account whether someone has substantial savings or cash on hand.
On the other hand, if you have a steady job, demonstrable income, and a good credit score, you may want to talk to your lender about refinancing. Just this morning, Freddie Mac announced that interest rates on 30 year mortgages have dropped to below 6% (5.94% to be exact). So there is some good news. Here's some more:
If you have an adjustable rate mortgages (ARM) tied to United States Treasuries, your interest rate may adjust downward -- maybe even to the 4.5 percent range. How could this happen? If the one year Treasury Bill Index is at 1.5 percent, and you have a 3 percent margin attached to your ARM loan, that adds up to a 4.5 percent interest rate.
If you have an ARM tied to the London Interbank Offered Rate (LIBOR) or some form of interest-only loan, certain lenders will lock-in adjustable rates for a small fee (around $250). Find out when and at what interest rate your loan will adjust to. The cost of converting your ARM to a fixed-rate loan may be well worth the savings to be realized long-term. Plus, any financial certainity you can obtain in today's climate is probably a good thing.
While we all have plenty of reasons to worry, smart home buyers with demonstrable income and good credit can find great deals. If you can whether the storm and stay on top of your mortgage payments, a good buy today could result in a terrific sale once the storm has passed.
As always, prior to obtaining a mortgage loan or entering into a real estate sale/purchase contract, you should consult with an experienced real estate lawyer. San Antonio lawyer Trey Wilson of R L Wilson, P.C. Law Firm has a diverse practice related to real estate, residential, construction, mortgage, landlord-tenant, homeowners association and general litigation. In September 2008, Trey Wilson was named by Scene in SA magazine as one of San Antonio's best real estate litigation attorneys. He can be reached at 210/223-4100 or www.sa-law.com.
Use the largest online attorney directory to quickly find detailed profiles of Texas lawyers and law firms in your area.
Đăng ký:
Đăng Nhận xét (Atom)
Bài đăng phổ biến
-
San Antonio HOA Lawyer Trey Wilson wrote: From The Buffalo News, N.Y. Dec. 17 — When neighbors took it upon themselves to clean Suzanne Tayl...
-
I have found that people that try to save money usually end up paying more! Many people are "afraid" to serve their spouse. I don...
-
Houston Lawyer Referral Service www.hlrs.org 713-237-9429 Their motto is - helping the Houston metropolitan community to find quality legal ...
-
Last March, a federal jury returned guilty verdicts in United States District Court in Austin, Texas against five current and former Austin ...
-
CHAPTER 9. POST-DECREE PROCEEDINGS SUBCHAPTER A. SUIT TO ENFORCE DECREE Sec. 9.001. ENFORCEMENT OF DECREE. (a) A party affected by a decree...
-
This chart illustrates the trend concerning the outcome of undergoing the TRCC Complaint Process
-
Retirement accounts, not unlike mutual funds and some stock accounts, are assets acquired over the course of many years. In dividing these ...
-
I recently hired Strickland Technology to revise my website. Please give me your comments. www.familylaw4u.com Fran Brochstein 713-847-6000
-
Dallas police officer Daniel Babb was indicted yesterday by the Grand Jury, so he's officially facing criminal charges now. Officer Ba...
Không có nhận xét nào:
Đăng nhận xét