There are many contributing factors to the housing mess we are in today. One in particular is the homeowners who purchased homes, taking out loans that they honestly just couldn’t afford. Fast forward to today and these same people are trying to stay afloat and avoid foreclosure.  

During the recent housing boom, home prices were prime and home loans were given to anyone who could fog a mirror. Home-shoppers were lulled by good times, they borrowed - sometimes overextending themselves- against the roofs over their heads. We are in a pickle now, with the national foreclosure rate at 18.3%, up from 7% from this time last year(http://money.cnn.com/2008/08/20/real_estate/subprime_homes_lead_downward_charge/index.htm?postversion=2008082609)

The President has implemented some plans to bail out many of the homeowners that are in tough loans putting them at risk for foreclosure.  Administration officials say they still oppose any taxpayer bailout for either people who borrowed more than they could afford or banks that made foolish loans during the height of the speculative bubble in housing.

As a real estate consultant, of course I want to help people achieve the American dream and help them buy a home. But… if it means getting them into a risky loan and putting their financial future at stake, I say it pays to wait.

“It’s a buyers market and in the Seattle area, we now have about a six-month inventory of new homes available for sale. This means is if you buy a home now and plan to stay in it for several years, that new home will increase in value and be a good investment. Mortgage rates are still at historically low levels and the employment outlook and overall strength of the Seattle area is very strong.” (http://righttimetobuy.org/current-market-trends.htm) Now most definitely is a great time to buy real estate- but only if one is ready for home-ownership. “Have realistic expectations- Be honest with yourself about what type of home you need. If it’s going to financially stretch you to make the payments for a large house with a big yard you don’t want to maintain, you should think twice before buying. Be realistic with your expectations. There aren’t any waterfront mansions for under $200,000.” (http://righttimetobuy.org/how-to-buy.htm)

As a true Dave Ramsey follower and just having a little common sense, I have adopted the idea of having a budget and living on less than you make. That is the only way to really have a grip on your finances and get out of debt.

Many have the dream of home-ownership and how wonderful it really is, but only when you are ready for it. “Renting should be a time of wisely having patience until you reach the point where you can buy property. It shouldn’t be a way of life, but it’s kind of like paying a patience tax until you can save up for a big down payment.” (http://www.daveramsey.com/tdrs/index.cfm/Renting) It is always better to be realistic about your housing and financial situation or your great American dream will quickly become a nightmare!

Anyone thinking about the idea of homeownership should get hooked up with a trusted financial advisor and/or loan officer with the heart of a teacher, to discuss your financial future and how to best prepare you for the financial side of homeownership.

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Have any real estate questions?, call me at (206) 661-7256

Have any mortgage/ financial questions?, call Patrick Flynn at (206) 999-7284