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Home › Forums › Closed Forums › Buying and Selling RE › Getting harder to qualify for mortgage loans… › Scaredy.. I freaked out a

December 2, 2009 at 10:56 PM #490373
HLS
Participant

Scaredy..
I freaked out a tiny bit starting around 2003 when I saw what was going on and I planned accordingly, with few regrets.

It’s not a matter of when the bottom will be, because different areas will hit bottoms at different times. The real bottom will be when the majority of people wake up and are REALLY scared about what they see (we aren’t there yet)…but then that could be a fake call,then a bounce and then a retest of the lows.
A bottom in an area will just be when very few people “must” sell, yet many will still be in denial. If nobody tries to sell, they can fantasize and pretend about the value of their house.

IF the govt stops the buyer’s tax credit end of April without another extension, that could be the start of the next leg down, partially depending on where foreclosure moratoriums and other manipulation is at the time and the status of ARM resets and further evidence of many more people not being able to hang on any longer due to continued harsh economic circumstances.

Even if we knew when the bottom will be, it’s really a matter of what will be for sale at that time.
97.5% of homes will not be for sale at the bottom.
Perhaps we could say that a 2500 Sq ft home might only be worth $350K at the bottom, but there might not be any for sale, it becomes a paradox.

Buy a house like you buy a car. You like it, you can afford it, you want it and you expect it to drop in value. Any appreciation should be a bonus, never an expectation. You wont be disappointed.

Find a house that you love.
Put 20% down, avoid mortgage insurance, buy the rate down, start out with some equity and a payment that you can afford, and don’t spend hours trying to figure out if gold or other investmants MIGHT have a better ROI, because you probably will not beat the compounded return of savings that you are guaranteed with a lower mortgage payment and no mortgage insurance.
Assuming that you want to stay in the area, you have to live somewhere.
I still think FHA is a sucker’s loan. With good credit put 10% down if you don’t want to do 20% and avoid the 1.75% funding fee and 5 years of mandatory mortg ins. Call me when you’re ready!