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What you need to know before renting a home in 2017

Reblogger
Managing Real Estate Broker with Platinum Properties- (931)771-9070 TN Broker: 208698

Remember the wild mortgage markets of 2005-2008? We are seeing much more stability in the mortgage industry now but as credit starts easing, are we heading down the wrong path?

Original content by Tony Lewis BRE# 01215778

Are you thinking of signing a lease rather than buying a home?

Stop!

Read this before signing on the dotted line!

Times have changed and the fear of a 40% market crash have all but disappeared.  Fear of loss is outweighed by personal and financial benefits.

Why did the real estate market crash in 2006?

  • It was political and both parties were to blame.  Democrats felt as though home ownership was the right of all Americans and Republicans went along with the idea.
  • The government forced banks and lending institutions to lend out money.
  • Creative financing was created.
  • First came Interest Only Loans.
  • Then came Negative Amortized Financing.
  • Then came "liar loan" with no verification of employment or income.
  • Then came stated income loans.

Financing for these creative financed loans was base upon adjustable interest rates with a starting interest rates low enough to make the payment affordable.

Home prices in many areas went up for three years in a row at rates of 28% 22% & 18%.  These prices were too high to sustain so the market began to fall.  Investors played the roll of the extra person in the game of Musical Chairs.  They abandoned ship quickly.  Once they began selling they flooded the market.  This added inventory had priced dropping like a lead balloon.

Adjustable Interest Rates made home unaffordable for a large number of home owners that were left clueless.  Honorable people were now losing their homes and walking away at an alarming rate.  Home prices in many areas dropped 45% or more.  The hardest hit homes were those with a Mello Roos Bond.  Communities with previous home prices of $750,000 sold at the bottom of the market for $280,000 due to an added monthly payment for Mello Roos and HOA fees of $680 per month.

 

Short Sales Replaced Foreclosures and the Bottom was formed

Home Ownership in 2017 is different, same and once again the American Dream.  Unfortunately the Millennial Generation and those previously devastated by the collapse of 2006 are losing out on the new real estate boom.

 

The market is now safer in many ways:

  • Lenders are scrutinized and must pass stress tests regularly.
  • Buyers need to prove their credit worthiness.
  • Loan to Income Rates are higher than before.
  • Verification of Income is mandatory.
  • Stated Income Loan are rare and the interest rates are high as are costs.
  • Appraisals are being performed by independent non-affiliated companies.
  • Buyers have much larger down payments and more to lose with failure

Home Ownership is beneficial, predictable and the New American Dream.

Price, Equity, Tax Benefits, Better Education, Stability, did I mention Pride?

Your Friends & Realtor,

Tony & Dani Lewis

RE/MAX of Valencia

www.TonyLewis.com tonyglewis@yahoo.com

Call/Text us at 661-510-7975

 

 

 

Posted by

 Centruy 21 Platinum Properties2130 Wilma Rudolph Blvd.

Clarksville, TN 37040

When you need Real Estate services in Clarksville TN

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Debbie Reynolds
"The Real Debbie Reynolds"

Check out all Clarksville TN Real Estate on My Website

                   
                   
931-771-9070 Office | 931-320-6730 Cell

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Comments (8)

Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Debbie Reynolds  Good re-blog not sure I agree

Jul 20, 2017 04:42 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Home prices in many areas went up for three years in a row at rates of 28% 22% & 18%.  These prices were too high to sustain so the market began to fall.  Investors played the roll of the extra person in the game of Musical Chairs.  They abandoned ship quickly. 

 

Food for thought right Hannah Williams 

Jul 20, 2017 04:46 PM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

Good reblog Debbie.  Many of us are more than aware of what and why it all came crashing down and we certainly don't want that ever again. Ever!

Jul 20, 2017 05:16 PM
Abby Stiller
TOP SELLING REALTY - Cape Coral, FL
SW Florida (239) 284-8637

Oh boy!  those years were pretty tough for everybody, hope it doesn't happens again. Thanks for re-blogging Debbie Reynolds 

Jul 20, 2017 06:34 PM
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Debbie

It makes good sense to buy and not rent.

Good luck and success.

Lou Ludwig

 

Jul 20, 2017 07:06 PM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Debbie

That was, indeed, a scary and difficult time for so many! Let's hope we never repeat it.

Today's market is different, both at our end as well as on the mortgage side of things. But one has to wonder where we are headed with the prices, overall affordability, and the rental market, too, at least in some areas, particularly here in CA! Salaries are certainly NOT keeping pace with prices!

Jeff

Jul 20, 2017 10:31 PM
Roy Kelley
Retired - Gaithersburg, MD

This is a good selection for a reblog. Thanks for sharing.

Jul 21, 2017 05:25 AM
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Thank you for reblogging the post. I missed reading the original one 

Jul 21, 2017 05:50 AM