Listing Courtesy of BERKSHIRE HATHAWAY HOMESERVICES GALLO-L
Whenever an unplanned and unwelcome financial situation develops, a Lewes mortgage-holder can find himself or herself in the onerous position of being unable to keep up with the monthly home loan payments. If the unhappy situation continues long enough, the likely result is a foreclosure or short sale. In addition to losing the property, the impact on personal credit then takes years to undo. That means it takes that much longer for a consumer to acquire a new home and start to build equity again.
Here as elsewhere, there were a raft of such Lewes mortgage defaults following the global financial meltdown. Even those who had no trouble servicing their area mortgages could have suffered when they found that falling property values prevented them from refinancing—even when the purpose was to improve their property. Although those events happened years ago, it’s only now that their aftereffects are finally working their way out of the system.
A recent article in NMP—the national Mortgage Professional’s magazine—delved into the changing status of those who lost homes in the turndown. The details they researched are interesting in themselves—details that are bound to have an impact on Lewes residential sales.
First off is the fact that enough time has elapsed for those who weathered a short sale or foreclosure to begin to return to eligibility. They’re called “Boomerang Buyers”—and nationwide, there are estimated to be 7,300,000 of them! In 2016 alone, more than a million will become eligible to return to the home-buying market. According to NMP, “they’re returning to the market in droves.” The hardest-hit states were Nevada, Florida and Illinois—but there are plenty of Boomerang Buyers scattered across the rest of the nation.
The improving mortgage eligibility landscape extends beyond those who suffered the actual loss of their homes. To the more than 7 million “distressed” homeowners whose properties are still underwater (those who owe more than market value), the government’s HARP 2 program is one possible remedy. Its guidelines encourage lenders to relax the loan-to-value caps that had prevented refinancing for many of those homeowners. Reports are that it has already resulted in an increase in such refinances.
Other program combinations are helping loan originators and Realtors® get more bank-owned homes back into homeowners’ hands. These are properties that make up the ‘shadow inventory’ of unsold homes, many of which have fallen into disrepair. Because of that, they’ve been difficult to finance—and therefore difficult to sell. Through FHA 203K and Fannie Mae’s Homestyle® renovation mortgages, more ambitious prospective owners—including investors—are discovering they now have mortgage options that can put those fixer-uppers within reach.
For those who have previously found it problematic to secure a Lewes mortgage with acceptable terms, it may be worth looking into today’s improved financing alternatives. Especially with mortgage interest rates at the levels we’re seeing this fall, what you find may be a pleasant surprise—one that puts you into the house of your dreams. Call me to discuss first steps! Call/Text me Russell Stucki at (302) 228-7871, email me at email@example.com, visit more listings at www.beachrealestatemarket.com.
If you have ever looked at your Lewes home’s mortgage balance and thought, “Yikes! That’s a lot of money!” you’re not alone. Such a gulp-inducing moment can be triggered by listening to one of the celebrated financial gurus explaining personal finance. Much of the latest financial wisdom is aimed at extolling the virtues of an entirely debt-free existence—which would seem to preclude any six-figure home loans on the family ledger.
For most every Lewes family in the early or middle years, that debtless goal—although it pencils out as a good idea—is pretty much unattainable. If owning makes more financial sense than renting (it almost always does), unless the family can operate from a garden shed, taking on a home loan is unavoidable fiscal reality. Since home ownership is the acknowledged path for making headway when it comes to shelter, is there a good reason to worry about the mortgage that goes with it?
Last week, Daniel Bortz, a reporter in the Finance section of realtor.com, came up with “8 Surprising Facts” about mortgages—a few of which should serve to alleviate any free-floating anxiety homeowners might associate with their Lewes mortgages—even hefty ones. Here are three that may or may not be very “surprising,” but in any case, certainly are relevant:
In October 1981, mortgage interest rates averaged 18.45%! When you take a look at your typical 2016 Lewes mortgage statement, and note how low your current monthly interest payment is, “Yikes! That’s a lot of money” should become, “Yikes! What a great deal!”
This could be the most anxiety-alleviating surprising fact of all. The Facebook founder refinanced his home with an adjustable-rate mortgage (the kind financial gurus tell you is the riskiest way to go). He refi’ed a 1.75% adjustable with a new 1.05% adjustable—a maneuver that saves him $1,981 a month! Why, since he could obviously pay cash for any property, would he take a mortgage at all? It could have something to do with the tax advantage home loans feature.
This is hardly surprising—but does bear indirectly on why your Lewes mortgage should be little cause for financial anxiety: it’s going to eventually disappear! And since the asset (the house) is counted as a positive which balanced the liability (the mortgage), month by month that liability gets smaller as the value you own grows. The Yikes! balance of the loan is negated by the Yippee! value of your property. (BTW, the “bizarre ways to celebrate” include Archie Bunker’s torching the paperwork in an episode of All in the Family).
These positives are the financial ones, but they are also bolstered by this real world big fat plus: owning your Lewes home undeniably imparts a feeling of security and stability—something that most of us find to be nearly priceless.
I hope you’ll feel free to give me a call for feedback or advice whenever any Lewes real estate questions arise. I’ll be standing by! Call/Text me Russell Stucki at (302) 228-7871, email me at firstname.lastname@example.org, visit more listings at www.beachrealestatemarket.com