Archive for August 27th, 2007
The Mortgage Meltdown and the Raleigh Real Estate Market - Part 2 of 3
August 27th, 2007 Categories: Mortgage and Finance
The Raleigh real estate market has definitely been affected by by recent changes in the mortgage industry. As a result, buying or selling real estate in Raleigh has changed too. Much confusion exists. We need a better understanding of what this means to the local buying and selling public.
In Part 1, I discussed what the mortgage meltdown is and what has changed in the mortgage industry. So what does this really mean to someone wanting to buy a home in Raleigh, North Carolina? What about someone selling a home? Today, let’s talk about the more obvious one… home buyers.
Buying a Home in Raleigh
In the previous article, I listed several things that have changed for borrowers applying for a home loan. Two big ones were:
- A good credit score is more important than ever
- Full documentation is required where it may not have been in the past
A more difficult to define change is the somewhat limited availability of 100% financing. Loans not requiring a down payment are still available, especially for conforming clients with good credit scores and full documentation. If either of these two elements are lacking, 100% financing may not be an option for borrowers.
The bottom line is that anyone seeking a loan to buy a home in Raleigh, or anywhere else for that matter, needs the advice of a mortgage professional now more than ever before. The rules have changed since you last purchased a home. I can promise you that.
Does this mean you might not be able to get a home loan in today’s environment? The only way to answer that question is to seek professional advice. For some, nothing has changed. There are still lots of financing options for home buyers. The sooner you discover those options, the better choices you can make. If you need the name of a good, reputable mortgage lender, send me an email or call me at 919-602-7000 and I’ll be glad to recommend someone.
The real estate agent you choose to represent you is also a decision you should make very carefully. The degree to which your agent has his or her mind around this new mortgage environment is critical to your home buying success.
In Part 3 of this series you will read about how savvy home sellers and their agents will be carefully considering the validity and associated risks of the financing terms in any offers they receive. The North Carolina Real Estate Commission considers terms of finance to be a material fact and requires accurate and complete disclosure. Your Raleigh real estate agent must be a skilled negotiator and capable of putting together an offer that will be accepted. Especially when there are competing offers. Unlike many other areas around the country, we still have that scenario here in the Raleigh market.
Your real estate agent must also have the guts to insist that you spend some quality time talking about your options with a good mortgage professional. Beware of the agent who puts you in their car and drives off to show you homes without a high quality initial consultation session that includes this conversation with a lender. Or at least requires that conversation as the very next step in the process.
Be sure to stop by the next day or two for the final installment in this series where you will learn the implication of all this for home sellers. We will also spend a little time expanding on the reaction of the financial markets and do a little speculating on whether we have seen the worst, or if there is more unraveling to come.
Be sure to click on the comments link below and get involved in the discussion. I’d really like to hear your thoughts!
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The Mortgage Meltdown and the Raleigh Real Estate Market - Part 1 of 3
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