Barry Noble's Blog

When are people going to get it? We have cyclical Real Estate Markets - a normal Market is 3 years up, half a year in the highest range and then again,  three years down, half a year in the lowest range. This Market Cycle can be affected by other economic factors - and in the current case, the greed of the sub-prime lending industry (also goaded on by some major bank participation) has talked hundreds of thousands of good, hard working families and individuals into buying homes beyond their normal means, using teaser rates to talk them in to the transactions, with several to five to ten years of low, interest only or very low payments - that for many are now coming due to change to the rising adjustable rates - and Foreclosures are growing like weeds in a rose garden - home values - already dropping notably, are about to plummet and even more foreclosures will ensue as people run from homes that are well below, in value, what the mortgage is.  Some were even allowed to get into worse situations when their homes, back then still on the rise in value, allowed for refinancing to buy that SUV or swimming pool or vacation. Now so many mortgages are well over what the property can sell for.

If there is still the opportunity - EVERYONE who is not an investor just out to flip houses, should get a fixed rate loan NOW. Don't wait until the Adjustable Rate (ARM) kicks in.  Bite the bullet and pay the fixed rate monthly mortgage - don't try to get interest only - or the three and four way loans - you'll only get into more trouble. GET A FIXED RATE 30 YEARS LOAN.  Don't worry about the value of the home later dropping below your mortgage owed. THE MARKET IS CYCLICAL and it hasn't failed yet - to turn around and when it does, it tops out higher than the last cyclical high. It doesn't matter - if you can make the fixed rate mortgage payments - keep paying them - stay with the game and just hang in there..........the property, the neighborhood, the Market in general will turn around and rise again - and those who dug in for the long haul will be rewarded.  If you read this and have friends who are worrying about their adjustable rate mortgages - or the value of their home, copy this and pass it on. If you want to discuss it further - contact me. Appraiser@FastAppraisalValue.com. I am a Broker & Appraiser - I'll answer any question I can (barring Legal Advice).  It is time the truth came out - I have been, for two years,  warning of the coming and now here, cyclical drop in the Real Estate Market Values and of the current and impending foreclosures - and telling everyone I can to get into fixed rate 30 years mortgages.  Even a 40 year mortgage would be fine. Later, you can pay extra principal - to shorten the term to 30 or 15, but for now - get into a fixed rate while the rates can be achieved down around (+-) 6-6.5%