Still time in 2009

Welcome to November …This year has just flown by. Remember back in January you said 2009 is the year I am going to pay off debt, or perhaps buy that new home.

Well there is still time…..Let’s talk about the paying off debt. With rates low it’s a good time to think about using the equity in your home to pay off your debts. With high credit card interest, or if your car payment seems like a big burden then you may want to think about a debt consolidation refinance. When considering whether or not to refinance your home, you must decide if the refinance will result in a net benefit to you. When considering whether or not to refinance your home, you must decide if the refinance will result in a net benefit to you. When considering whether or not to refinance your home, you must decide if the refinance will result in a net benefit to you. It is ultimately up to you to decide what is in your best interest.

Consult a mortgage consultant like myself to see what mortgage programs you can qualify for and which ones will provide you with the best deal for your unique situation. When you refinance, you might be able to lower your interest rate and monthly payment — sometimes significantly. You might also be able to “cash out” some of the built-up equity in your home, which you can use to consolidate debt, improve your home, and take a vacation — whatever! With lower rates and balances, you might also be able to build up home equity faster with a shorter-term new mortgage.

Be careful with debt consolidation refinancing. Sadly, in many cases a family will refinance their mortgage to pay off high interest rate credit card debt only to have these cards maxed out again in just a few months. In this instance the family in question has converted their unsecured credit card debt into a debt secured by the most important thing they own: their home!

Remember that your home and its equity is your largest asset and savings account. You should only refinance if it is with the right lender, at the right time, and for the right reasons. There are new loan programs coming out all the time, one of these programs may better fit your current financial needs. Discuss the possibility of refinancing with your mortgage consultant, and they can give you the additional information that you may need when deciding whether or not to refinance.

 Now let’s talk about the purchase of a new home and or the sell of your current home if you currently own a home. If you are considering buying a home in the near future, there are several critical factors which you should be aware of. By and large, the current market is a buyer’s market. That does not mean; however, that most buyers will be able to simply sweep in and pick up a sweet deal for just pennies on the dollar. If you really want to take advantage of the current market, you need to make sure you go in fully prepared.

1. First, you need to make sure you recognize that when it comes to real estate a few months ago, or in some cases, a few weeks ago might as well have been two years ago. Dynamics within the industry are rapidly changing and you simply cannot rely on how the market looked even six months ago. What someone was asking for their house a few months ago is not relevant. You need to make sure that you update yourself on the current market within the local area where you will be buying.

2. In addition, if you have previously purchased a home you need to make sure that you do not fall into the trap of thinking that what you paid for your last home is relevant. This is because it is not. You do need to make sure that you give some thought to the difference between the amount you will be selling your current home for and what it will cost you to purchase a new home. These are definitely much more realistic numbers and will give you a better idea of what you can afford and more importantly what you cannot afford.

3. A few years ago the market was rife with people who were gung-ho about selling their home on their own. For many people, the idea of selling their home on their own meant being able to save the commission. If you already own a home that you will be selling in order to fund the purchase of your next home, it is critical that you understand that now is not the right market to try to go it alone. Yes, you might save the commission, but your home might also sit on the market for a year or longer. There is far more inventory on the current market than there was even two years ago and it is much more difficult to sell a home today. Save yourself the hassle, trouble and time and hire a professional who can help you to get the attention you need to sell your home. If you aren’t working with a Realtor I will be glad to refer you to some the best in the industry

4. Make sure you are aware of the current interest rates. At the current time, any interest rate that is between 4.75 and 5.75 is a good number. If you can get an interest rate in that range, grab it and run and be happy for it.

5. You should also understand that there really is a big difference between working with a mortgage professional. While there are any number of people out there right now hustling trying to help find loans for buyers, when you are making an important financial decision such as buying a home you will need to make sure that you are working with someone you can trust. It really can make a big difference in the long run.

6.  You also need to give some thought to how long you plan to be in your next home before you actually commit to buying it. If you do not plan on staying in a home for at least the next five to seven years then you need to seriously think about waiting to buy. In the event that the market continues to drop somewhat over the next year and you buy a home today, you could be set to experience depreciation in the value of the home you buy. That is not necessarily a problem unless you plan to sell it in the next couple of years. If you are in it for the long haul, overall, it will not make that much difference to you. If you plan to sell in less than one or two years; however, it could be a big problem.

7. Finally, recognize that despite the dire numbers and predictions, there really never has been a better time to buy a home; provided that you are ready. If you are in it with a long-term commitment in mind and you are financially ready, there are some great deals available. Over the course of time you will likely find that you will be glad you made the decision to purchase.

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