(For a previous blog on keys to investing in real estate, check HERE.)
Our country has never seen the combination of low real estate prices along with bottom-basement interest rates such as we have now. Never!
...yet a lot of people still don't think they can or should jump into investment real estate or even home ownership. Why is that?
I"m hearing three main doubts when I talk to people these days:
(1) They are concerned that they can't make the down payment or monthly payments.
(2) They are afraid that the intricacies of home ownership are beyond their capabilities.
(3) They are concerned that they can't qualify for a home because of a negative income history and resulting credit score.
I can't say any of them are invalid, but I can say definitively there are solutions and more information out there to help everyone overcome these objections.
For example, as I've heard my mortgage friends say, in this economy with these interest rates, every $1000 of house will cost you between $620 and $650 per month FULLY-LOADED (meaning taxes, insurance and all.) That means you should expect to pay around $650 a month for a $100,000 home. Most people can buy a home from $100,000 to $150,000 and be very comfortable for less than they're probably paying in rent right now!
(Side Note #1: The key here is to discipline oneself to purchase a home in a comfortable price range. Many people are tempted to "over buy" in this market and risk putting themselves in an untenable situation in the coming years if their lives shift.)
Next, I hear people saying they don't feel up to the task of repairing or doing other fix-up projects to a home. Since it's been shown the best equity lies in purchasing an existing home in an established neighborhood, a lot of people are concerned the house they buy won't have the amenities and features they desire. (This is somewhat related to the temptation to over buy.) The only argument I can add is that the cost of remodeling, painting, updating the landscaping or even expanding a room is nothing compared to the thousands or even tens of thousands of dollars of equity a home owner could have upon closing on a modest house in an older section of town. In fact, it's not even close.
There isn't any evidence that the new McHouse in the McSubDivision on the edge of town is a good deal. It's akin to purchasing a brand new car...
(Side Note #2: Real estate still offers most people more security than the stock market does.)
Finally, there is the issue of credit scores and qualifying for a home loan. Over the past couple of years, a large number of people have lived with uneven income and unemployment wreaking havoc on their credit scores. They think their past has knocked them out of the possibility of home ownership for a long time - maybe forever. The good news is that isn't true. Most mortgage officers can get you into a home with credit scores in the 620 to 640 range. This isn't good credit, but it's workable. You won't get the best rates, but you'll get into a home.
Further, credit restoration companies are doing amazing things to help people understand their finances and rebuild their credit and credibility. I work with Rising Point Solutions and we're one of the groups doing great things to help people realize their dreams of home ownership. If you're thinking about purchasing a home in the next few months or have been denied a loan, email me at mark@risingpointsolutions.com or call 281-846-5720 any time.
My view is simple and two-fold: (1) There truly has never been a better time to purchase real estate and (2) no one should ever let poor credit stop their deal again. Let me help!
Our country has never seen the combination of low real estate prices along with bottom-basement interest rates such as we have now. Never!
...yet a lot of people still don't think they can or should jump into investment real estate or even home ownership. Why is that?
I"m hearing three main doubts when I talk to people these days:
(1) They are concerned that they can't make the down payment or monthly payments.
(2) They are afraid that the intricacies of home ownership are beyond their capabilities.
(3) They are concerned that they can't qualify for a home because of a negative income history and resulting credit score.
I can't say any of them are invalid, but I can say definitively there are solutions and more information out there to help everyone overcome these objections.
For example, as I've heard my mortgage friends say, in this economy with these interest rates, every $1000 of house will cost you between $620 and $650 per month FULLY-LOADED (meaning taxes, insurance and all.) That means you should expect to pay around $650 a month for a $100,000 home. Most people can buy a home from $100,000 to $150,000 and be very comfortable for less than they're probably paying in rent right now!
(Side Note #1: The key here is to discipline oneself to purchase a home in a comfortable price range. Many people are tempted to "over buy" in this market and risk putting themselves in an untenable situation in the coming years if their lives shift.)
Next, I hear people saying they don't feel up to the task of repairing or doing other fix-up projects to a home. Since it's been shown the best equity lies in purchasing an existing home in an established neighborhood, a lot of people are concerned the house they buy won't have the amenities and features they desire. (This is somewhat related to the temptation to over buy.) The only argument I can add is that the cost of remodeling, painting, updating the landscaping or even expanding a room is nothing compared to the thousands or even tens of thousands of dollars of equity a home owner could have upon closing on a modest house in an older section of town. In fact, it's not even close.
There isn't any evidence that the new McHouse in the McSubDivision on the edge of town is a good deal. It's akin to purchasing a brand new car...
(Side Note #2: Real estate still offers most people more security than the stock market does.)
Finally, there is the issue of credit scores and qualifying for a home loan. Over the past couple of years, a large number of people have lived with uneven income and unemployment wreaking havoc on their credit scores. They think their past has knocked them out of the possibility of home ownership for a long time - maybe forever. The good news is that isn't true. Most mortgage officers can get you into a home with credit scores in the 620 to 640 range. This isn't good credit, but it's workable. You won't get the best rates, but you'll get into a home.
Further, credit restoration companies are doing amazing things to help people understand their finances and rebuild their credit and credibility. I work with Rising Point Solutions and we're one of the groups doing great things to help people realize their dreams of home ownership. If you're thinking about purchasing a home in the next few months or have been denied a loan, email me at mark@risingpointsolutions.com or call 281-846-5720 any time.
My view is simple and two-fold: (1) There truly has never been a better time to purchase real estate and (2) no one should ever let poor credit stop their deal again. Let me help!
