Market Update

It has been a couple of months since I have sent out a newsletter. I have been out of the country for a while and just returned last week. From what I see the housing market is still slow, which of course is beneficial to potential buyers.

The National Association of Realtors has pushed back the potential for price recovery to the 2nd quarter of 2008. There is an wide selection of homes available on the market today. My website, www.housewealthy.com covers many techniques that buyers can use to negotiate the best price in this market.

With historically low mortgage rates this summer and sustained job gains, it could be a good time for first-time buyers with long-term plans to test the housing waters.

Is Your ARM hurting?
More than two million subprime adjustable rate mortgages (ARMs) are about to reset at much higher rates in the next few months. Many buyers took out 2 and 3 year ARMs in 2004 and 2005 which offered low "teaser" rates. Once these mortgages reset, their payments may balloon more than 30%.

With mortgage lending standards getting tighter, it is important to take advantage of refinancing into a more stable mortgage product before the loan payments increase. It is important to take a look at your credit rating and plan to get out of these loans ahead of time.

An inability to qualify for a stable loan product may force you to sell your home (if you have equity) or lead you to foreclosure once the payments rise. This October alone more than $50 billion in ARMs will reset, according to Economy.com. They report that this will be a historic record. If you currently have a short-term ARM that is about to reset, feel free to contact me to discuss your options. Taking a proactive approach now may help prevent future financial strain.