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by Charles Essmeier
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The rate increased in March and April over the same months last year, suggesting that more buyers may have discovered that they have mortgages on which they cannot make the payments. The foreclosure rates are the highest in Florida and Texas, which have foreclosure rates that are nearly triple the national average. With interest rates near historic lows, mortgages are more likely to become even less affordable as interest rates increase.
What this means for prospective buyers is that they must do even more research before buying a home. Buyers should genuinely consider whether or not they could actually afford to make home payments that include a reduction in principal. If a buyer can’t afford a home without taking out an interest-only loan, the buyer probably can’t afford the home. Buyers should be suspicious of home appraisals and should, if possible, ask the appraiser if they are being pressured to provide a predetermined figure. Every buyer wants his or her home to appraise for at least the amount of the loan. But the current market is one where buyers are straining to make payments on prices that are at record levels. The last thing any buyer wants is to strain to make payments on a mortgage that exceeds the value of the home. The real estate market is in a precarious state at the moment, and prospective buyers should do as much research as possible to make sure that they can both pay for, and keep, their new home.
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a Website devoted to
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