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.
Refinance
- 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.
Purchase
- 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.
I'm Mike in Tucson, your preferred Tucson, AZ Mortgage lender.
Think of me as your Tucson mortgage expert.
Call me if I can help you with a purchase or refi mortgage;
(520) 349-9090
Mike,
Many, many people are waiting for low cost 4% mortgages. The unfortunate thing is they are passing up today's great opportunities for this pipe dream. The American Dream and system are being dismantled day by day those that wait may never have a chance again.
Every one wants a bigger and better deal so they do nothing. Those that succeed will take advantage of today's options which are great when compared to any ones experience.
Bill
Bill,
Your analysis is better than my post! I really appreciate your input; it's why I'm a subscriber to your blog.
Mike in Tucson
Mike,
Analysis becomes part of each post. The thing I like best about blogging as compared to other media, I've been regularly published since 1963/4 is that blogs keep getting better as the readers interact with the author!
Bill
Mike,
Hold on tight...the merry go round is picking up speed...!!! Thanks, Fran
Mike - I too, love Bill's analysis and insights. Interesting article from Bloomberg that I missed. It may not be a bad idea to pass it on...
So many buyers are missing out on great deals waiting for the perfect time. I hope they all don't act together.
Mike,
You hit the nail on the head on this one. Those striking right now are making great deals that are positioning themselves in an excellent position for the future!
Dorie,
Thanks for commenting, and good luck today!
Terry,
I don't mind if they do. LOL
Jason,
Thanks for stopping by; see you on your blog.
Fran,
Bet you've been busy for the last three days! Things are picking up.
Bill,
Thanks! We appreciate you.
Mike in Tucson
HI MIKE! How are rules, conditions, etc., for lot loans going these days? And for lot loans on second homes??!!! -- Gab
Hi Mike - I think people may be starting to "get it". Both the existing homeowners trying to take advantage of refinancing while they can and the first time home buyers scrambling to snatch up the affordable homes while they can take advantage of the $8,000 tax credit. Our ABCs of Homebuying class at the local community college had a lot of motivated students in it last weekend!
Karen,
I'll have to check our local community college to see if they offer something like that. Thanks for the idea.
Gab,
Things are tightening up for lot loans. They must be improved (all utilities) and the buyer has to come in with at least 20%. Even then, term is restricted. Call me.
Mike in Tucson
Waiting for the market to bottom is rather foolish since it won't be known until after the fact. Then interest rates will be up. I wonder how many people will be kicking themselves in a couple of years...
Doreen,
Add to that the fact that the government has gone stark raving mad. Strike while the iron is hot!
Mike in Tucson