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Mortgage Foreclosures are Helping New Home Buyers
by Sheryl Landrum
CMR Columnist
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The current mortgage meltdown and the surge of home loan foreclosures are actually opening doors for low and moderate income earners. How do foreclosures translate into home buying opportunities?
Mortgage foreclosures bring down the price of houses, which enables more homeowners to buy homes and qualify for home mortgages. As many homeowners seek relief from mortgages they can no longer afford, a huge amount of home inventory is available today. In San Diego County, as well as many other California counties, homes today are listed for 1/3 the price they would have sold for last year. When a property is in foreclosure or in danger of foreclosure, banks and homeowners may be willing to sell for a lot less than they would if they could afford to pay the mortgage on the property. Unfortunately, selling homes for less money also brings down the appraised value of other homes that are similar or located geographically close by. While this makes it difficult for people to refinance their home mortgages, it does create opportunity for those who could not qualify for a home loan when houses were more expensive. How do you avoid falling into the same trap as other mortgage holders who are now unable to afford their homes?
With mortgage interest rates still at historical lows, it's a good time to take advantage and opt for a secure mortgage and not a high risk one. Remember, many homeowners now facing foreclosure had opted for high risk home loans. Learn from them and protect yourself and your new home.
About the Author
Sheryl Landrum is a Senior Loan Officer with First Capital Mortgage in San Diego, California and a freelance writer specializing in mortgage issues.
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