Deb Espinoza's Real Estate BLOG

Everyone always says they want to wait for that perfect time. Catch it at the bottom, get in before it's too late. I am here to tell you the time looks ripe to be NOW for the Home Buyer. Today the President has made it clear that he wishes to shut down the government backed mortgage guarantors Fannie Mae and Freddie Mac. This action will cause those loans to be made by the private banking sector and will result in not only higher interest rates since the burden of risk will fall on their shoulders alone; but also tighter underwriting standards (which today seems impossible since the standards are so difficult already).

Last week FHA lowered the FICO requirements from 620 to 580, and FHA now has a down payment minimum of 3.5% which is attractive to many buyers. There is also no requirement to have reserves left in your bank accounts for payments after you pay all your mortgage and closing costs, which is required on most conventional loans.  

And I'm still holding to the fact that there are boat loads of homes in the 'shadows' waiting to come into the light. Including already foreclosed upon inventory that the lenders haven't listed for sale yet, loans in default that the lenders haven't taken the final step on to foreclose, and many, many, many, did I say many? homes that are in limbo trying to work on modifications or short sales with incompetent, undertrained, uncaring reps that I picture sitting in a big room somewhere watching faxes of homeowner's files come over. After the fax comes through, the system of hired monkeys toss the papers in the air, make paper airplanes, throw some through the shreader, and wad them up into a paper 'basketball' and shoot it in the 'round file. While they rotate through a line answering the two customer service phones to say "no sir, we did not receive your paperwork". This will continue to provide inventory and keep the prices down, but if there are no affordable loans to be found you may be left sitting on the sidelines and wondering how you got left out. Let me also answer the question as to who WILL be purchasing these homes. Investors. Investors who rent them. Investors who will rent them to buyers that can't easily buy something for an equal or less payment a month. Investors who can now take advantage of the fact that they were prepared for this perfect storm and can now Raise Their Rents and start making some good returns.

So for those looking to buy a house, NOW may be your last chance to take advantage of great home prices, available and affordable mortgages and reasonable costs. So if purchasing a home has been a dream you've been waiting for, you may want to get off the fence and go talk with a loan officer to see exactly what you will qualify for and how much you'll need to make your dream come true. Then get yourself an experienced knowledgable REALTOR and let them help you find and negotiate your new home.