Can you help me buy a home?

By
Industry Observer

The most frequent question I hear from consumers who call me about an ad is, "Can you help me buy a home?"  Often the answer is that I probably can't, at least not in the near term.

The fact that you wanted to buy a home was about all it took in 2004-2006.  It was not uncommon for people who could not afford the rental deposit to instead buy a house with totally empty pockets.  With home prices escalating at unrealistic rates, credit was extended to virtually any human who could sign the documents.  If you couldn't make payments, there was little perceived risk to the lender because the home could be repossessed and re-sold with little or no loss.

That was then and this is now.  Without adequate credit and reasonable income to debt ratios, simply wanting to buy a new home will not get the job done.  You will need very good credit and/or a substantial down payment to buy a home today. 

A consumer called me a few days ago asking for help buying a home.  He lost his home to foreclosure not long ago, and he said it was because he lost his job.  Now he is in an extended family shared rental, underemployed, and he is behind on all his bills.  He has no money, but thinks he could sell his car and get a couple thousand dollars after loan payoff.  He is considering filing for bankruptcy to help get his bills under control.  Can I help him?  Not this year, and maybe never.

If you're thinking about firing your landlord, start planning now, even if it means that you will be renting for a few more years.  Today's home buyers are up to date with their bills, not already drowning in debt, and have a little cash in savings.  For those more of a work in progress, now is the time to contact a home financing professional who is willing to coach you in getting on the path to home ownership. 

 

Posted by

 Mike Carlier  Lakeville, MN

 

612-916-3033

 

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Ambassador
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Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

I had a similar call this week. The buyer called on one of my listings. Everything went well until he mentioned his recent bankruptcy. But the good news is with work anyone can rebuild their credit. We are the land of second chances!

May 19, 2012 01:05 AM #1
Rainer
19,839
Dave Kinkade
Home Locators Property Management Tampa Florida - Tampa, FL
Director of Marketing - Property Management

Agree with Doug.  Everything is (or at least can be) temporary.  We Americans tend to think we deserve a quick fix to our problems.  If people can start taking the long approach to their credit and goal of purchasing a home, it can happen.  Unlike 2003-2006, there is no easy credit and inattentive underwriting.  The American Dream is still alive but it requires diligence, discipline and a real plan.  I don't think that is a such a bad thing.

May 19, 2012 01:17 AM #2
Rainmaker
1,351,744
Li Read
Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC
Caring expertise...knowledge for you!

Wise advice, and I also agree with Doug's thought...always possible to recreate a pattern in a positive manner.

May 19, 2012 01:46 AM #3
Rainmaker
522,522
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Doug, agreed, but there has to be a change in behavior.  Sometimes that happens and sometimes not.

Dave, it seems that the problem is that some folks can't break their spending habits for more than one billing cycle. 

Li, one issue seems to be that some folks want "stuff" more than a nice place to call home.  Many eventually reach a point in their lives when "stuff" moves down to second place and the credit healing can begin.

May 19, 2012 05:35 AM #4
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Rainmaker
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Mike Carlier

More opinions than you want to hear about.
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