The Importance of a Housing Recovery for the Overall Economy and how it Affects Veteran Home Owners
The US stock market has acted like a roller coaster for the past
week. Down 500, then up 450 then down then up and then up again. There
is so much fueling this craziness that at times it is just down-right
insanity. In just under two weeks, we have seen Fannie and Freddie
basically fail, Lehman Bros has gone bankrupt, the US treasury has
pumped in hundreds of billions of dollars and who knows what will be
next?
One thing almost everyone can agree on is that until we have a housing recovery, that this market will continue to suffer and bleed. What is a housing recovery? Eric Kandell of Flagship Financial says, "A true housing recovery will occur not when prices come back up, but when prospective buyers can actually get approved for mortgages again." The major problem in a housing recovery right now, regardless of what the FED or anyone else does, is that good, solid home buyers CAN NOT seem to get approved for loans like they used to.
If interest rates are back down to historical lows and housing prices have fallen by 40% in some areas, how are we still seeing so many people get denied for mortgage loans? The problem is that for the past 3-5 yrs anyone could buy anything and that is why housing prices got so inflated. You could have been a bag boy at a grocery store putting yourself through college with a part time job, but if your credit was just okay you could buy a million dollar home with ease. Sure it sounds crazy, but it is the absolute truth. So now that prices are pretty far down in comparison to the past two years, and interest rates are low, we should be out of the woods, correct? The truth is that that is 100% false and this is what is the scariest thing buried in our market today.
There cannot be any real housing recovery any time soon. Does that mean months, years, or more? Mortgage insiders say it will be much longer than we expect. "A ton of our prospective home buyers are being turned away and they have solid jobs, great credit, and even very little debt. The reason they still can not get approved for a home is that the typical American home buyer does not have any money saved away. It is not uncommon for our loan officers to find buyers with 700 Fico scores and high paying jobs, but absolutely no money to their name. "Take a look at the credit report and the boat, the 3 cars and the time share will explain to you where the money went." Says Nate Burt of Flagship Financial.
Ever since FHA has discontinued its down payment assistance, there is only one type of buyer that can still buy a home with NO MONEY DOWN. Some people may feel at first glance that this sort of financing has caused this real estate bubble and that we are doing our nation's veterans a disservice. You must first understand the additional benefits of VA home loans before jumping to such a conclusion. Veterans pay absolutely no mortgage insurance, unlike FHA and most conventional and even subprime loans (now extinct). Veteran home loans also have a history of carrying lower than normal interest rates, making payments much more affordable. The VA allows veterans to refinance as often as needed when rates go lower and to do so is normally very simple.
The housing market has a ways to go before we can consider things fixed, and the mortgage industry sure has a lot of changes to go through also, however this great Nation's military will play an important role in the recovery and LowVARates.com will do all they can to assist veterans in bringing to pass this recovery.
Veterans and active duty military along with the reserves and coast guard can still qualify for home loans with no money down and no money in the bank. Deparment of Veterans Affairs has gone to great lengths to insure that our finest citizens have every opportunity to own a piece of the American Dream. According to a representative from LowVARates.com, "veterans can have less than a 600 Fico score, have a debt ration over 50% and absolutely no money in the bank, and still be able to buy a very nice home at a very low fixed rate."
One thing almost everyone can agree on is that until we have a housing recovery, that this market will continue to suffer and bleed. What is a housing recovery? Eric Kandell of Flagship Financial says, "A true housing recovery will occur not when prices come back up, but when prospective buyers can actually get approved for mortgages again." The major problem in a housing recovery right now, regardless of what the FED or anyone else does, is that good, solid home buyers CAN NOT seem to get approved for loans like they used to.
If interest rates are back down to historical lows and housing prices have fallen by 40% in some areas, how are we still seeing so many people get denied for mortgage loans? The problem is that for the past 3-5 yrs anyone could buy anything and that is why housing prices got so inflated. You could have been a bag boy at a grocery store putting yourself through college with a part time job, but if your credit was just okay you could buy a million dollar home with ease. Sure it sounds crazy, but it is the absolute truth. So now that prices are pretty far down in comparison to the past two years, and interest rates are low, we should be out of the woods, correct? The truth is that that is 100% false and this is what is the scariest thing buried in our market today.
There cannot be any real housing recovery any time soon. Does that mean months, years, or more? Mortgage insiders say it will be much longer than we expect. "A ton of our prospective home buyers are being turned away and they have solid jobs, great credit, and even very little debt. The reason they still can not get approved for a home is that the typical American home buyer does not have any money saved away. It is not uncommon for our loan officers to find buyers with 700 Fico scores and high paying jobs, but absolutely no money to their name. "Take a look at the credit report and the boat, the 3 cars and the time share will explain to you where the money went." Says Nate Burt of Flagship Financial.
Ever since FHA has discontinued its down payment assistance, there is only one type of buyer that can still buy a home with NO MONEY DOWN. Some people may feel at first glance that this sort of financing has caused this real estate bubble and that we are doing our nation's veterans a disservice. You must first understand the additional benefits of VA home loans before jumping to such a conclusion. Veterans pay absolutely no mortgage insurance, unlike FHA and most conventional and even subprime loans (now extinct). Veteran home loans also have a history of carrying lower than normal interest rates, making payments much more affordable. The VA allows veterans to refinance as often as needed when rates go lower and to do so is normally very simple.
The housing market has a ways to go before we can consider things fixed, and the mortgage industry sure has a lot of changes to go through also, however this great Nation's military will play an important role in the recovery and LowVARates.com will do all they can to assist veterans in bringing to pass this recovery.
Veterans and active duty military along with the reserves and coast guard can still qualify for home loans with no money down and no money in the bank. Deparment of Veterans Affairs has gone to great lengths to insure that our finest citizens have every opportunity to own a piece of the American Dream. According to a representative from LowVARates.com, "veterans can have less than a 600 Fico score, have a debt ration over 50% and absolutely no money in the bank, and still be able to buy a very nice home at a very low fixed rate."
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