Rates rising and tougher qualifying on the horizon?

[SD Realtor]

Every case varies lepetit. Trying to find a market bottom is really hard. I can make an argument to buy and I can make an argument not to buy. I will tell you that a fair number of buyers are buying moreso because of the destruction of our currency and want to take advantage of low rates. It is entirely feasible that you may wake up a few years from now and see double digit interest rates. If you are sitting on a 4.5 or 5.5% mortgage you may be pretty happy. While it is a SURE THING that home prices would depreciate substantially in this environment it is not a gaurantee that the depreciation will scale. Maybe it will, maybe it will not.

The problem is that there are always ALOT of people with cash, and by this I mean larger entities, that will be able to set a market floor by purchasing homes for investment and getting a stable return on them. So does that floor necessarly match the rate hike? I do not know.

What I recommend to my clients is to do what is right for them. I tell them what I think will happen, that both lending standards will certainly tighten up, and that inevitably interest rates will go up. Just like food and fuel and basic commodities will go up. Look at the price of cotton today. It is as high as it has ever been!

Sorry to go off track. It is just that we are in uncertain times and it is hard to make a choice. I know many people are looking for a return on money right now including myself and they are purchasing rental properties. I think opportunity abounds. I think that the govt has shown that they will indeed use taxpayer money to bolster the housing market. I also think that they are in a precarious perch with regards to the far east bolstering our appetite for defecit spending.

I think that you should continue with the CV search you have been on. It never hurts to offer lowball offers. All they can say is no. CV is one of the strongest areas in San Diego… Still lots of sellers in denial. If you can afford the home and are secure with your jobs and do not plan on moving then you should be okay.

[Scarlett]

I am in a similar situation with Angela. I am looking to buy, but with only 10% down – in PUSD. The voice of prudence says to save 20% down and buy in 3-4 years from now so that I won’t have PMI. I CAN put 20% down if I take a home loan from my 401K. Either way if I buy now I would take a risk since I won’t have much left in cash reserves. ANd who knows about job stability? Mine would never be more certain than a couple of years at a time…

If I wait a few years the houses I wanted may not change that much in price, but the monthly payment would have increased by a lot due to the rates increase – and they would have become once again unaffordable for me. So as a buyer I would continuously chase the market, having to settle for much less and throwing money on rent down the drain.

I do agree that those will be good things, only I lament that I’ve been caught in the middle – they should’ve had those measures in place YEARS ago (or rather, maintain them).

[Scarlett]

I am in a similar situation with Angela. I am looking to buy, but with only 10% down – in PUSD. The voice of prudence says to save 20% down and buy in 3-4 years from now so that I won’t have PMI. I CAN put 20% down if I take a home loan from my 401K. Either way if I buy now I would take a risk since I won’t have much left in cash reserves. ANd who knows about job stability? Mine would never be more certain than a couple of years at a time…

If I wait a few years the houses I wanted may not change that much in price, but the monthly payment would have increased by a lot due to the rates increase – and they would have become once again unaffordable for me. So as a buyer I would continuously chase the market, having to settle for much less and throwing money on rent down the drain.

I do agree that those will be good things, only I lament that I’ve been caught in the middle – they should’ve had those measures in place YEARS ago (or rather, maintain them).

[Scarlett]

I am in a similar situation with Angela. I am looking to buy, but with only 10% down – in PUSD. The voice of prudence says to save 20% down and buy in 3-4 years from now so that I won’t have PMI. I CAN put 20% down if I take a home loan from my 401K. Either way if I buy now I would take a risk since I won’t have much left in cash reserves. ANd who knows about job stability? Mine would never be more certain than a couple of years at a time…

If I wait a few years the houses I wanted may not change that much in price, but the monthly payment would have increased by a lot due to the rates increase – and they would have become once again unaffordable for me. So as a buyer I would continuously chase the market, having to settle for much less and throwing money on rent down the drain.

I do agree that those will be good things, only I lament that I’ve been caught in the middle – they should’ve had those measures in place YEARS ago (or rather, maintain them).

[Scarlett]

I am in a similar situation with Angela. I am looking to buy, but with only 10% down – in PUSD. The voice of prudence says to save 20% down and buy in 3-4 years from now so that I won’t have PMI. I CAN put 20% down if I take a home loan from my 401K. Either way if I buy now I would take a risk since I won’t have much left in cash reserves. ANd who knows about job stability? Mine would never be more certain than a couple of years at a time…

If I wait a few years the houses I wanted may not change that much in price, but the monthly payment would have increased by a lot due to the rates increase – and they would have become once again unaffordable for me. So as a buyer I would continuously chase the market, having to settle for much less and throwing money on rent down the drain.

I do agree that those will be good things, only I lament that I’ve been caught in the middle – they should’ve had those measures in place YEARS ago (or rather, maintain them).

[Scarlett]

I am in a similar situation with Angela. I am looking to buy, but with only 10% down – in PUSD. The voice of prudence says to save 20% down and buy in 3-4 years from now so that I won’t have PMI. I CAN put 20% down if I take a home loan from my 401K. Either way if I buy now I would take a risk since I won’t have much left in cash reserves. ANd who knows about job stability? Mine would never be more certain than a couple of years at a time…

If I wait a few years the houses I wanted may not change that much in price, but the monthly payment would have increased by a lot due to the rates increase – and they would have become once again unaffordable for me. So as a buyer I would continuously chase the market, having to settle for much less and throwing money on rent down the drain.

I do agree that those will be good things, only I lament that I’ve been caught in the middle – they should’ve had those measures in place YEARS ago (or rather, maintain them).

[Author]

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