The confusion caused by the way the media has reported the issues affecting the housing and credit markets has resulted in far too many people who want to buy a home deciding to wait. Others are sitting it out because they believe their credit rating is too low. Most could not be making a more egregious mistake. Those who live in markets beset by declining home values may have been justified in waiting, but market values are beginning to stabilize, and other factors that make waiting at this time a mistake are rapidly approaching their deadline.

There may never be a better time to buy than now. Among the greatest advantages to home buyers currently is the fact that it's a buyer's market. Increasingly, home sellers are agreeing to pay a buyer's closing costs, or shaving higher percentages of the price from the top. Interest rates are still low as well, but the Federal Reserve is straining to keep them low to stimulate activity in the real estate market. Just how long the Fed can keep it up remains to be seen.

What you have heard about the availability of financing has nothing to do with the availability of funds for home loans, and you don't need sterling credit to borrow for a home loan. The fact is that prospective buyers with FICO scores of 580 or higher can obtain financing. For that matter, a buyer with a score of 560 or lower may be able to obtain financing if they can demonstrate that they have been able to manage their finances over the past year.

One deadline has in fact already passed. As of October 1, 2008, the up-front FHA Mortgage Insurance Premium for FHA loans with the minimum down payment has risen from 1.5% to 1.75%, and the monthly premium has gone up from .5% to .55%. These are marginal increases that amount to pennies per month, literally, compared to what follows.

The next deadline that will affect those who wait are the new HUD regulations affecting buyer contributions for FHA loans. On January 1, 2009, the amount of the sales price that a buyer will need to pay from their saved funds, usually as a down payment, will increase from 3% to 3.5%.

Finally, the $7,500 first time home buyer tax credit will only be available until July 1, 2009. Don't wait until June 1! To take advantage of this one, a buyer will need to have closed the sale by July 1. If a buyer does not have a working contract by May 15 or so, and is not pre-approved for the loan, they are risking loosing out on this.

Waiting now could not only result in loosing significant bargaining power, lower cost to buy and lower payments, and the opportunity to take advantage of $7,500 of interest free money over 15 years—with a built in mechanism to make sure your can repay it, the tax advantages of home ownership—it could also postpone many another vehicle available to assure a secure financial future.

What are you waiting for?

I was just reminded about a fact , and began wondering whether it was well known. Since so many homes are being foreclosed on, I have my doubts about consumer awareness of the fact. Whether you are a pro or a consumer, you should be aware that the provisions of the Mortgage Forgiveness and Debt Relief Act of 2007 are not automatic.

Since I cannot say it better, I sugest that everyone read the following article: 

What You Need to Know About Short Sales and Loan Forgiveness

The power of positive thinking can't turn away the the tsunami created by the plunge taken by lenders when the sub-prime fiasco imploded on them. But, ask yourself, "who does this really affect?"

"Well, "yourself should answer, "it primarily affects lenders who held on to their own loans, and investors in the secondary market who bought those loans from the originating lenders."

The fact of the matter is that the effect on most people who are not invested in the secondary mortgage market is a result of their reaction to news that really does not affect them. This mistake is due in part to the irresponsible reporting on the fiasco by the media, and the failure of the public-at-large to pay close attention to the details when the media glanced over them, while focusing on the down-side of the matter.

In part, the problem is also due to the collapse in values in a few local markets that immediately preceded the sub-prime fiasco. Then too, that pervasive trend in corporate America to outsource everything is gnawing away at us, and makes headlines when it kills another job market in the US. There seems to have been a subsequent wave of fear that swept the national market due to a kind of generalization about the market that has nothing to do with most local markets.

Home buyers especially, but home sellers too, are actually creating a general malaise in the market as a consequence. For the most part, it's not especially problematic for the overall industry, but it is negatively affecting those who have fallen under the shadow of doom-and-gloom cast by that wave.

Let's get out into the sunlight and look around. Lenders are still making loans, and the rates are still low. Lenders, especially those hurt by their own greed, can't sit back and stop making loans. Lending is how they make their living. People who should never have gotten their sub-prime loans in the first place will find it a lot harder to find loans, or pay more for less, but people who qualify for loans are still getting them at about the same rate as before the fiasco.

It's also a buyer's market, and existing homes can often be bought with sizable reductions on price or terms that provide assistance to cash-strapped buyers. New home builders have been offering huge incentives--upgrades and even cash at closing--to reduce excess inventory due to speculative over-building during the fiasco. We are getting close to the end of this though, because builder inventories are declining.

Sellers and would-be sellers should not be put off by the buyer's market either. The difference in their net would be nominal with the right agent representing them. The right marketing strategy and an agent with good negotiating skills can do the job. It's a matter of pricing your home right and offering the incentives that will make your home appealing to buyers, and using these to make the best possible deal.

Buyers and sellers who have been holding back because they are uncertain about the market, are only delaying what they could enjoy now--and it's possible that real market conditions may make buying or selling a home a truly difficult proposition in the not too distant future.

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Notes:

1 Though the real estate market in some states has suffered real set backs, the impact of the reported downturns, their effect on existing home sales and the forecast for the San Antonio market are bright.

2 Two articles in ReaEstateJournal.com address the short-sighted greed involved in the sub-prime mortgage fiasco: "Fraud Seen as a Driver In Wave of Foreclosures" and "Lender Lobbying Blitz Abetted Mortgage Mess"