If you are considering purchasing a home or refinancing—you can go to quickenloans.com or lendingtree.com along with local mortgage lenders in your area—to determine what loan will best suit you—and your family. You can compare closing costs, APR's and Par rates to determine what loan will best serve your—and your family's long-term interests.
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2011 Housing News
As of December 2011 the building of new homes in Atlanta continues to be slow.
One indication is the size of the new home community magazine—as it is about 1/10th the size of the magazine that was on the market in 2006.
There are very few “new” new home communities that have sprung up in 2011 in the metro Atlanta area.
There are however, numerous new home communities that are incomplete due to the real estate and financial market meltdowns from 2007 to 2009.
As for the National outlook the commerce department reports that there was roughly only 315,000 new homes sold in 2011. By comparison only 323,000 homes were sold in 2010.
Keep in mind most economist state that at least 700,000 new homes a year should be sold in order to sustain a healthy housing market.
At this time nationwide new homes only account for 10% of the housing market. Each new home created creates 3 jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.
With the economy still in recovery mode—many are renting because they can’t afford to buy or don’t feel a home is a good buy as an investment at this time.
Apartment construction is increasing at a rate nearly twice as fast as it was a few years ago.
New–home sales are based on single-family homes that are sold. Builders in Atlanta and many parts of the Country have stopped working on many projects because it is hard for them to get financing or for them to compete with cheaper resale homes.
The job picture is improving some but remains weak, and unemployment is still high. Many potential purchasers want to buy—but can’t qualify for a loan or make the required down payment.
For the year 2011 refinancing and home buying closely resembles the year of 2010 in many respects.
Many consumers lack the home equity, credit scores or cash to refinance or buy—even with the 30 year interest rate below 4%.
Why You Should Refinance or Buy Now?
At this time rates are at record lows—and if you have the means and you can shave a point or two—off of your current rate—it might make sense for you to refinance.
If you have a solid job, stable finances (emergency and retirement fund in place) and strong credit and you plan on remaining in your home for a number of years—it makes sense for you to “run the numbers” and see if a refinance or home purchase is appropriate for you at this time.
Why Consumers Are Having Difficulty Buying Homes?
Many potential home purchasers can’t afford the required down payment, are out of work, lack the income needed, or have high debt loads.
Even with a 31% decrease in housing prices from four years ago—most lenders won’t provide loans to those who are saddled with the above burdens.
In addition, many consumers do not feel that the housing market has truly bottomed out—therefore they prefer to rent at this time.
Many see the 20% down-payment that many lenders now or will require—as something that is unattainable based on their current income and their current living expenses.
In addition many lack the credit score needed—as banks are now more stringent on their credit requirements.
The average credit score in the United States is now below 700—and many lenders require a 720 or higher score to get a prime (best mortgage rate available) mortgage.
If You Plan On Refinancing—It Is Difficult Now?
Many consumers have seen drastic drops in their homes value and they are not eligible to refinance.
New legislation of HAFA 2 in October of 2011 should provide relief to some homeowners.
Home-equity is now under 40%—the lowest rate since the Great Depression. Many lack the equity or credit score—or both to qualify for a refinance, however HAFA 2 should address some of those issues.
When you refinance at a lower rate you pay less interest on your loan, therefore you would have more money to spend, save—or invest.
If you qualify, and it makes sense for you to refinance you could potentially see savings in the thousands on an annual basis.
Say you have a loan for $200,000 at 6% with a 30 year term and you refinance down to 4.5%—your savings could be close to $3,000 a year.
Many homeowners who are refinancing at this time are using the savings wisely and are saving—or paying off their debt to position themselves better for this uncertain economy.
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About This Article:
The above article was written by Thomas (TJ) Underwood. Thomas (TJ) Underwood is an active real estate broker in the state of Georgia and is the writer behind The Wealth Increaser, Home Buyer 411, Home Seller 411, The 3 Step Structured Approach to Managing Your Finances, Managing & Improving Your Credit & Finances for this MILLENNIUM and CREDIT & FINANCE IMPROVEMENT MADE EASY—FREE GUIDE.
He is the creator of TheWealthIncreaser.com where he regularly blogs about helping consumers improve their credit, finance and real estate pursuits in an intelligent, consistent and proactive manner. He’s always looking for ways to make intelligent finance improvement happen for those who “sincerely desire” success in their future.
You can contact him from a number of sources but the most direct way is to contact him through the contact us block that can be found at the bottom of this page.