If you read the current media and their opinions about financing you might think that this a poor time to purchase because financing is expensive. I believe that is not the case.   In fact I believe that this is a very good time to borrow money to purchase real estate. The following are my thoughts and comments about this subject.

Comments:
The so called sub-prime mortgage industry is gone probably for ever. I believe that is a very good thing because the people that funded these so-called “new” mortgage guidelines new exactly what they were doing.  The sub-prime mortgage industry chose to ignore the established guidelines that have been reviewed applied and scrutinized for over sixty years.  The current issues although politicized have been strategically expected.  They now are asking the US Government to “bail” them out after they have received huge fees and bonuses for creating all of the sub-prime products.

The United States is by far the best country in the world in providing housing for its citizens. Other countries do not have the experience and the underwriting guidelines that has been the mainstay of the mortgage industry.  The well established guidelines formed by the millions of loans since the 1940’s that established all of the mortgage secondary markets have been working and I must say ‘Working very well thanks you”.  These guidelines provide the underwriting and the pricing guidelines that allow the industry to be funding and capitalized.

What does this mean to you?

If you fall within the long held guidelines mortgage money is very inexpensive.
If you purchase a house now you will probably pay the least amount for a similar house ever.
Now is the time to buy if you are guideline applicable.
Do not buy now without a “Real Estate Buying Professional”. There are many real estate professionals that are trained and experienced in purchasing house in this very “Buyers Market”

What to do now:

Research and hire a Real Estate Buyer Professional. This will be a relationship that will save you a lot of money by “not” making poor decisions.  Have at least three lenders evaluate your borrowing guidelines. They should be able to give you a Good Faith Estimate (GFE) close to the estimated budget that you have established. This should be at no charge but if they want your business that should not be too hard.  Make sure that the asset is evaluated by a “business” plan that includes carrying costs and includes the re-sales soft costs.  Make sure that you have enough real “Capital” to be able to complete the business plan and the exit strategy that allows you to sell your investment or lease it to whomever can afford it. I suggest that you have real capital to be able to withstand 6-9 months of no tenant or buyer but obviously hope for less.
Make sure that your real estate asset is priced fairly and not “discounted” because of a panic atmosphere.

I learned a long time ago that whatever the big banks are doing you probably should consider the opposite.

Good Luck.