Home Values vs. declining values. Should you Buy? Yes. If You Are in the Market.

Hi,
It's Melissa.  Among many of my sources of income, I've been a loan officer for twelve years. I'm a Sr. Loan Officer, meaning well, I know what the hell I'm doing and I've never had an unsatisfied client, never. In fact, many thanked me for steering them in the right direction as I could see the bottom about to give in the market. I'd been expecting it, any experienced Loan Officer, not telemarketer who calls your home bothering you, no, we tailor suit your loan. We try in every way to get you the best loan, my suggestion... if in a pending loan??? Lock it. you can get a 6 percent loan, for thirty year, no prepay, thru FHA, Freddie Mac, Fanny Mae.  I highly suggest a strong 30 year right now, especially  why the rates are low, and they moved up last Fri due to the Stock Market Bonds market that is, taking a fifty point dive.  Still I was able to lock a 660 Mid Score Full Doc purchase loan, with 3% down, at 6.5 30 year.  Had his scores been higher, say, 780? His rate would have probably been 5.875 on a thirty year, not to bad for being in a growing recession.

It is my suggestion that you take advantage of SHORT SALES, before they go to Auction.  You get a pre approval letter from your Lender, someone like me, and have a friend with their Real Estate License, so they can write up the offer and act on your behalf.  YOU DO NOT want to do it alone, you need professional guidance, unless you already have it yourself?  Find someone with an RE License.

I serve as both, but find it better to do one, or the other, I'm better at loans due to the research, finding the best loan you can for your client, is very satisfying.

Also, work with the lender.  I'm taking half of what I usually would have charged, but in these hard times, the buyer/borrower really needs a break too, and will very likely forward you some business, ask them to cut their origination, they'll still make some good money, not the kind they made three years ago, accepting the 3 points back on these Adjustables which have caused near panic and havoc, and they were designed to be offered as a no cost loan to the borrower.  The 3 points on say 400K avg, that's 12K.  The guys costs aren't going to be more than seven.  You still made five, with your 50-80% split, that doesn't suck, and the guy got a free loan, WITH a 3 yr pre pay mind you, which MUST be disclosed, but anyhow, the point is, a lot of people got taken advantage of, I had to start working from home as I coudn't be around the things I was hearing other LO's plucked from jobs and just thrown on the phones, no training in loans, or the market or anything.  But it eventually made me sick.

Though Values are expected to drop another 10-20% over the next year, even with that, are values now are of that of 2004 give or take. When the market steadies, when people start buying homes, which THEY SHOULD, the rates make it impossible not too, you do however require at least a 580 Credit Score, Proof of Income, Debt Ratios below 50, no BK's in the last seven years, or Foreclosures, money in the bank to prove downpayment and at least 1-6 months of reserves depending on the lender, and have a Loan Officer run your credit, get your prequaled, easy, and then get a letter for what you are approved for.  In this day and age, you can simply be driving to Target and see a home that says "all offers" or bank owned, "in forecloser" and go and talk to the agent in charge.

Values go up, they come down.  It's like everything.  But nothing can go up forever or drop forever, there's always a point, when it must equal out, and the worm turns, only this time when he does, he wont' be packing an oozie.  The market will naturally follow the trend of new purchases.  The more people purchase, the better the values are and begin to level out, then soon, who knows when, one-ten years is the best anyone can say, though we expect that within five years (and that's my bet fivish almost six maybe years) the market will have turned around, and you start seeing your investment do it's work. 

That is all your home is.  An investment.  A stock you live in.  When it's not doing well, you lock in, settle in with a safe rate and payment, face reality that your 750K home can no longer go on having a 1700.00 min payment. It's a nice idea???!!  Yes, I've done many many adjustables, but never ever ever without locking them in a solid rate for five years, with little tax deferrment, they're still all very happy now, and were planning on selling, in next couple years but otherwise, 30 years are great. They're back in style, so to speak.

You're going to get your money back, but like any stock, lest it's an IPO or one you have that splits, it takes some time to make money on your money... the safe way. 
If you get in a house that a year ago was 700K now 450K, you think you're not going to make your money back???? Especially if it's in a good location. Location, Location, Location.

If you're in California, and you purchase in the Inland Empire??? Expect your values to come back much slower.  The more expensive, more densely populated area's usually near the ocean, are going to see a turnaround long before an inland city would.  In other words, if you'd been trying to get into say, (though it is in Riverside, but Affluent and beautiful) Canyon Lake, CA, .. well normally?  You couldn't get in there ever, without at least a 400K purchase, and that would have been smallest of small no where near the large man made lake.  Now?  You can get a house on the water for 700K, maybe less?  A normal custom home (they're all customs, we have a vac. home there) you can get in for IN the two hundred thousands!  IT's unheard of.  So  there's many places like that, which you may have entertained the idea of living in, but didn't dare thinking it was out of your league.  Perhaps not, definitely right now???? As myself and husband are in the biz, have taken advantage of this ourselves, recently moving into an artists loft I'd always wanted.  Two years ago?  Wouldn't have been possible, so look around.  Keep your eyes open.  Your dream home, may not be your "dream" home, for much longer.  She may become all your own, and land,..... no matter what anyone says, is still... the safest bet.  Just ignore or ride out ... the storm.

(listen... almost everyone Ive known for the past seven years, has grown increasingly wealthy, making up to 15K per loan due to the non disclosure of the purpose of the 3 point rebate, who have all got three houses, had, all the cars, and the attitude to go with it. My husband and I live modestly, material wealth really doesn't mean that much to me, and the day I buy a new car of a car lot, somebody slap me hard please... cOME ON!  It is like throwing your money down the toilet.   A friend who works as a detailer on the lot of a place in Temecula, got a 2000 Merc CL 250 or something like that, the SUV all wheel drive.............. for 3605.00 out the door. trade in value was 3K.  EVERYTHING IS just CRAZY...but point being, all those who had allllllll that stuff that was so great and made them feel like people like me, who was renting still, and had a 2004 beemer convrt. that I owned, I was and am happy, but all of them, and I do mean ALL??? They were foreclosed on everthing. Lost their business, houses(of which some of these I speak of had as many as five homes, cars, 5th wheels, dirt bikes, and are all................. Renting.  Hmmm.  Some listened, few, but some, when I begged to downsize, and explained why. They all told me values wouldn't drop like that overnight, nor would interest rates rise quickly either.  By enabling Freddie and Fanny who were almost bankrupt, we now have great still historically low, and I think that after the election, there will be some definte change, probaly a lot of up and downing.. then, .. we'll see)

If you have questions, feel free to ask me, I'd be happy to try and help.

So, after all the babble... The point again.  I really think, if you're in the market, and if your not find out if you are, then find a good investment, and buy.  Rent out a room if you must, but to get in now, and plan to stay?  You WILL be happy in five to ten?  when does happy ever go with... five to ten? lol

God Bless, good shopping! 

plz forgive any misspellings, I know I should spell check, but it's broken, and I have work to do. try harder next time.  :-)