Backlogs in foreclosure processing are causing delays in home-price improvement and could wind up affecting the cost of a mortgage, thereby hurting Columbia SC home buyers wanting to get a mortgage.
As unpleasant as it is for everyone involved, when a borrower can’t — or decides not to — make payments, the more quickly you can move the property back into the inventory and get a new homeowner in it, the better it is for the community.
How the Slow Process Affects Columbia SC Home Buyers
Even if you’re not in foreclosure, if you live where processing times are long, that could eventually end up affecting you when you’re in the market for a new mortgage.
If you’re in a home not making payments for a long time, your taxes, insurance and interest payments may be building up. Suddenly, you owe $100,000 more than you owed in the first place, and you would likely have a hard time becoming current.
Freddie Mac and Fannie Mae are considering state-to-state pricing on mortgages because of long processing times. In states where there are long turnaround times, Freddie and Fannie would calculate the cost of foreclosing on properties and how long it would take. The costs could be built into the mortgage rate you’d get in those states.
High foreclosure inventory volume also affects home prices. Prices are rising faster in places where the foreclosure process isn’t so delayed.
Nationwide, the average time for homes to spend in the foreclosure process is 382 days. That may not seem so long, but it’s actually an extended stretch compared with the average of 336 days in the third quarter of last year — and only 140 days in the third quarter of 2007.
Columbia SC home buyers need not be discouraged. There are still lenders who are ready to focus on your mortgage application, and prices may never be this low again. Contact us today to schedule a no-obligation consultation on the current real estate market in the Columbia SC area.
Not long ago, buying a Columbia SC home was the best investment you could make. Not only did it provide a place to live, but it provided instant wealth for many homeowners through rapid home-price appreciation. Renting seemed risky. If you didn’t own a Columbia SC home, you’d miss out on equity buildup that would bankroll a move to a bigger, better home.
In this market, the realistic way to look at buying a Columbia SC home is to secure a place you want to live. Buying a Columbia SC home doesn’t guarantee you’ll make a big return on your investment. You might if you stay long enough. Over the long term, home-price appreciation usually outpaces the inflation rate. However, this varies from one locale to the next.
If Your Columbia SC Home Doesn’t Work Out
If you buy a Columbia SC home that you find out doesn’t work for you and sell it again within a year or so, there’s a chance you’ll lose money when you take into account the costs of buying and selling.
No one knows for sure when the economy will substantially improve. Last year, some economists predicted a double-dip recession. That appears to be less risky at the moment. In the fourth quarter of 2011, the nation’s economic output grew at an annualized rate of 2.8 percent, which is not recession territory, but is not considered good enough by some economists.
Columbia SC Home Market Prediction
Will 2012 be the turnaround year for housing? Lawrence Yun, the National Association of Realtor’s (NAR) chief economist, thinks that the combination of increasing home sales, record-low interest rate and low home prices “demonstrates a market in recovery.”
Other good news for anyone thinking of buying a Columbia SC home is the recent increase in consumer confidence and the decrease in the inventory of homes for sale to a level not seen since March 2005, according to NAR. Yun thinks the drop in inventory will contribute to price stabilization and possible modest price growth in the near future.
Problems for Columbia SC Home Buyers
There is pent-up demand on both the buy and sell side. One problem for those considering buying a Columbia SC home has been the lack of quality inventory. That may improve this year as some sellers decide they’re tired of waiting for a better time to sell.
Buyers have the advantage of low interest rates and home prices. Buyers considering buying a Columbia SC home who can find the right house and stay put for five to 10 years will probably be happy they bought now.
When buying a Columbia SC home, you’ll need a large sum of money, and not everyone can afford to pay cash when buying a home. The majority of home buyers need a mortgage to fund the purchase. The buyer would then pay off the debt within a fixed time set by the lender.
Buying a Columbia SC Home – What to Look for in a Lender
There are a lot of lenders you can approach for a loan. They are not equal though so you’ll need to use care in choosing one. To pick the right lender, a home buyer has to keep in mind several things.
If you’re buying a Columbia SC home, one of the first things to look for in a loan is fixed interest rate. This will give you a good idea how much you will be paying off over the entire length of the loan, because it won’t change. You can then determine if you can afford the monthly payments.
In addition to making sure you get a fixed-rate mortgage when buying a Columbia SC home, shop for the best interest rate. Keep in mind, the lower the rate, the longer you’ll have to pay off the mortgage.
A low monthly payment may mean you will spend a long time paying off your mortgage but it will give you more money every month after paying off the mortgage. You never know when an emergency could crop up, and having a lower monthly payment leaves more you can save which can then be used for emergency situations.
Always look at the closing costs. Usually, this will be in the 2 to 3 percent range of the final selling price of the property you are buying. Obviously, the higher the closing cost, the less appealing the loan would be to any borrower.
Watch out for teaser interest rates. This means the lender would give you a low interest rate in the first years of the loan then hike it up in later years. If your financial capability does not improve, you could find yourself unable to afford the monthly payments.
By taking these things into account, you should be able to find the best lender to approach when buying a Columbia SC home. We can help you find a good lender if you find you’re not up for the challenge yourself.
Are your family and friends always telling you that now is the perfect time for you to invest in Columbia SC real estate?
Maybe you’ve already considered the benefits of home ownership. The decision you make regarding buying your first home can be risky, for sure, but if you’ll follow these simple tips, your nervousness about the first time home buying process may be eased just a bit.
1. Define Your Search Parameters
You can begin the home search process using the Internet. Most interested home buyers actually use the Internet first before they contact a real estate agent when looking for homes simply because it is quicker and more accessible. You can even search for homes for sale using our site, but after making a quick search, you will be able to find real estate that might be of interest to you. There are lots of homes for sale in the MLS that includes homes for sale which are viewable through pictures, virtual tours and aerial photographs of the neighborhood. If you have limited budget, it is also easier for you to sort these homes depending on the price range you can afford.
2. Home For Sale Visits
Visiting 20 to 30 homes per day is not advisable. You should limit your visits to six to seven per day. You may not be able to make the most out of home viewing when you force yourself to see too many houses in a day. You may not be able to remember the significant details in each property you go into and that might not help when you start picking the right home for you. Make sure you eat enough food before viewing homes so your brain will work well during the process. It’s hard to concentrate on things when you’re hungry, and this is too big of a financial purchase to make the wrong decision because you weren’t thinking clearly.
3. Neighborhood Observation
Looking at a particular property in and of itself is not enough when you’re buying a home. You should also check the location of the property and the neighborhood to make sure you will be getting a good deal for the house. Is the location near the important establishments in the community? Do you need your house to be near schools or your workplace? How about the traffic in the neighborhood? Location is a very significant factor that sets the market value and demand of the house. If you have plans to sell the house in the future, make sure it has good resale value.
4. Working With an Agent
You have the option to either buy a house with or without the help of a real estate agent. If you think you already have the skills and knowledge required to successfully buy a property, then you can choose not to get an agent. But for first time home buyers, it is very advisable to have an agent assisting and guiding you throughout the process.
These are just a few of the “getting started” tips for first time home buyers. We encourage you to do more homework by browsing this site and looking for more home buying tips.
We’d be happy to assist you with answers to any questions you may have. Just use the comment link below to contact us.