Sub-Prime loans? Foreclosures

Sub-Prime loans is all over the news, what does it mean to you?  The answer is simple.  But first you have to know what a sub-prime loan is before it means anything.  These are the loans that were discounted for borrowers that did not have enough money for a conventional loan.  The most popular was the ARM or (Adjustable Rate Mortgage)  This loans interest rated adjusted upward within a specified time frame in the contract.  Some were yearly others were stepped to increase in three and five year intervals.  The talk is that 18% of all of these sub-prime loans are going to foreclosure. 

So what does that mean to you?  Simple the lenders are going to be competing for the same buyer sellers are seeking.  This increases the inventory of homes for sale.  This also means that the savvy buyer can find a bargain.  HUD homes are also coming back on the market in record numbers.  People that are facing foreclosure have rights and they have options.  Most do not know their rights or options.  Lenders do not want to foreclose they would much rater have the monthly payments.  So anyone facing the possibility of foreclosure should get the facts about what their rights are before it is to late.  

Something else that is very important to every buyer and seller is that fact that missing a single car payment can drop your credit score 100 points.  Having a foreclosure can hang on your credit report for 7 years.  Finding the right agent with knowledge of the market is the key to selling and buying.  Today most agents have never dealt with market conditions we are faced with today.  Interest rates are very low and remember it was only a few years ago that we thought 7% was a great interest rate.  So buying right now can be the best investment you can do while the market is on the down side.  Sellers have to remember they may get less for the property they are selling but they are going to buy for less too! 

If you have any questions concerning foreclosures, buying or selling email me and I will respond promptly.

Remember if you see what you want "act" tomorrow it could be someone else's!

Sincerely,

Gary White
Associate Broker
Five Star Real Estate