| Easy
Come - Easy Go!!
Experts predict
the recent recession and slow recovery will bring a wave
of loan defaults and an increase in foreclosures nationwide.
While the Fed lowered interest rates, thus helping to
drive down mortgage rates; and, investors flocked from
Wall Street equities, for safe and secure bonds; the over
supply of money, has caused bond rates to drop. With mortgage
rates closely tied to bond rates, we are now experiencing
the lowest interest rates in years. Good news for home
buyers and good news for foreclosure investors!
Many first-time
home buyers are going for broke, with nothing to lose!
Buy now while they can, before interest rates rise, or
prices get totally out of reach. The affordability index
is falling nationwide, with some of the worst affordability
ratios in California. Less and less Americans are able
to afford the median price home. In fact, their lucky
to afford any home at all! With interest rates at their
predictable bottom, now is their "chance to get in".
Home buyers are scrambling to get in on the home ownership
market!
These current
low interest and no-money-down loans are causing a significant
number of first-time buyers to stretch their limits. As
rates rise, which they inevitably will; or anything disrupts
the income and wage stream for those leveraged buyers,
foreclosure rates will also rise.
Even with an
appreciating market, there are still foreclosures. Luck
has been defined as: "When opportunity meets preparedness."
If a homeowner cannot make his monthly payment, due to
a loss of his job, or his spouse's job; or if his adjustable
interest rate loan ratchets up, the payments will be missed
and the process begins. Either the homeowner needs to
sell, or face foreclosure.
Most
homeowners under a notice of foreclosure, don't believe
it will actually happen to them. They live in denial!
They believe they will get a new job; interest rates will
go back down; their inheritance will come in; or, they'll
win the lottery! Unfortunately, in most cases none of
the above happens and the homeowner slowly sinks lower
and lower into a black hole. By the time the homeowner
realizes he is in real trouble, it's too late.
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