Archive for category Mortgage News
Housing Prices Falling; Sooner or Later?
Posted by Top Home Loans in Economy, Mortgage News on August 31, 2010
On the news, radio, and newspapers everyone is talking about how house prices are expected to drop from 10% to 20%. At first it was stagnant growth, but now it is a bubble that is expected to burst over the next term of the economy; however, when can we expect housing prices to fall?
House prices aren’t like grocery store prices or stock prices. A house is only worth what a person is willing to pay for it. Since your house is not sold frequently, it is difficult to tell how much it is worth. When people list their property, they rely on the advice of a real estate agent to them how much they think that their property is worth. If the real estate agent is wrong, then no one will show up. If the real estate agent lists too low, then too many people will show up.
The fact is that now, no one is showing up to buy houses.
When people stop buying, people have to offer lower house prices to get people to buy. Lower prices can inspire people to buy even if they did not consider it before in the past.
How much is the difference between property values today and values if property values decrease by 20%?
A house today that would cost $600,000 would cost only $480,000 if the market dropped 20%. The difference is over $120,000. If you bought a house for $600,000 and the house dropped by that amount, would you want to stay in the market? Most likely not.
Usually, price increases tend to take years to increase; however, house bubbles bursting take a short amount of time. It can only take a time less than a year to drop into lower values. With the herd mentality, once some people get scared, then everyone becomes scared. Expect that once house prices start dropping, that they will drop fast.
When do you expect house prices to bottom out? When will you be buying a house? Leave your response in the comments below.
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Simply Mortgage Testimonials
Posted by Top Home Loans in Mortgage News on August 22, 2010
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How do I know how much my Property is Worth?
Posted by Top Home Loans in Mortgage News, Property Management on August 18, 2010
Before speaking with a mortgage broker or calling your bank, it is critical that you know how much your property value is worth. The problem is that you have no idea how much your property is worth. You have never taken a class on property valuations and you are not a real estate agent, so how do you know.
You could hire a real estate agent or a real estate appraiser; however, there are several costs to getting this done, and it won’t be worth it in most cases.
You could look at your property tax statement for the property valuation; however, this is usually old, and it will be out of line in comparison with the actual property value. This is not the most accurate way to value your property.
The best way to value your property is by using MLS. The trick is to log on and search for houses in your neighborhood. These houses will be what you compare your house to. You will need to make adjustments on the price to match what you think your property value is worth. After you do a comparison to several houses, then you will have a rough estimate on what your property value is worth. Once you have an accurate value, then you need to increase that value by about 30%. This will allow you to accommodate for things you may have missed. Keep in mind that you will rarely get this value, but this will allow for your mortgage to get the best value.
What happens when there are no properties selling in your area?
If you cannot find any properties to compare against other properties, then you will need to determine the value on your own. You will need to think about how much you figure you could sell the property for, then you would want to increase this value by 20% or 30%. This will allow you to have an accurate value.
Once you know how much your property value is worth, then you can talk to the bank with confidence. When your bank asks you how much your property is worth, then you will be able to answer that question accurately and confidently.
How do you determine your property value? What do you think your house is worth? Leave your response in the comments below.