We all make business and personal finance decisions every day. What to buy, what not to buy. What to put off, like replacing the tranny after 130,000 miles on the Ford Explorer.
If you're making a decision on whether to (1) buy a home, or (2) refinance the one you have, here are a few bullet points to help you decide between sooner and later.
- The ACORN billions are likely to be spent politically. "Freeze foreclosures." That's not a good prospect, because it will prolong the inevitable "bottom." Home prices continue to decline because of uncertainty in the market, and what your home will appraise for now is likely to be higher than what your home will appraise for in two to six months.
- Even though the market dropped to a 12 year low yesterday, interest rates went up. Wrong way, Charlie! Today's rate and today's appraised value are better than tomorrow's prospect.
Strike while the iron is hot.
- While tomorrow's value on a particular home may be less (and we all like to pay less) the prospect of available funds to buy that house are better today than they are likely to be tomorrow. Strike while you can.
A Bloomberg article this morning by Gavin Finch underlines the necessity of acting now:
The Fed’s quarterly Senior Loan Officer survey released Feb. 2 found that more than 65 percent of banks restricted lending the previous three months even as they received about $200 billion of taxpayer funds from the government.
U.S. gross domestic product probably shrank 5.4 percent in the fourth quarter, the biggest contraction since 1983, according to the median estimate of 60 economists surveyed by Bloomberg. Moody’s Investors Service says corporate defaults may rise to 16.4 percent by November, the highest since the Great Depression and about three times the current rate.
After taking about $1.1 trillion of writedowns and losses since the start of 2007, the financial system remains so troubled that the government may have to nationalize some banks for a short time, Senate Banking Committee Chairman Christopher Dodd said.
Call me if I can help you with a purchase or refi mortgage;