Thinking about refinancing or buying a home? A recent RisMedia Post underscores important considerations for homeowners contemplating a refinance. Most apply to new purchases as well. Mary Ellen Podmolik, reporter for the industry publication, states that “a multipronged whammy of lower home values, new appraisal guidelines and tighter lending requirements frequently derail consumer’s from snaring loans at lower interest rates” adding that only 60-70% percent of loans applied for end in a closing. Whether or not you qualify for the best mortgage rates depends on a multitude of factors, from the type of home for which the loan is being sought, your credit scores, source of income, and job longevity, among others. New appraisal rules have also have their impact.
There’s no reason to be alarmed, but good reason to be well-informed. Check out the full story at Changing Landscape: Crucial Factors to Keep in Mind Before You Decide to Refinance.
Yet whether you want to buy or refi, there’s still incentive to brave the waters.
“Enough with the doom and gloom about homeownership,” says Brett Arends in a recent Wall Street Journal piece, Ten Reasons to Buy a Home.
It’s a buyer’s market. Deals abound. According to Standard & Poor’s Case-Shiller Index, which pools data on 20 major cities, home prices have dropped about 30% from their peak. More significantly, home prices have now arrived at “fair value in relation to household incomes,” according to Fund manager Jeremy Grantham at GMO, “who predicted the [housing] bust with remarkable accuracy.” While most areas of Santa Fe have undergone far milder adjustments, there are good values in virtually every area of the city, with Santa Fe neighborhoods closest to downtown showing steady value relative to cost.
If mortgages aren’t always easy, they’re at least cheap. A 30-year loan is running around 4.3% –a historic low. And while home ownership today isn’t the fast track ticket to wealth it once was, over the long term, it has proven to be a solid portfolio performer and an inflation hedge. “In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But yields there have plummeted of late…[making] homeownership look a little better by contrast.” For more info on the value of real estate with respect to bonds, check out Bloomberg’s Real Estate Premium Near Record to US Bonds Signals Time to Buy US Property The National Association of Realtors offers their take in two recent articles: Ten Market Facts for Uncertain Times and Existing Home Sales Move Up in August
Read up on reasons to choose Santa Fe in AARP’s America’s Top Places for Boomers to Retire and US News’ The Top Ten Housing Markets for the Next 10 Years. We could go on–and do–about the value of living in the City Different. Happily, we’re not only voices in the choir.
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