Wednesday, December 7, 2011

Is Now the Time to Buy

With all the back and forth in the Economy, the Stock Market, the Unemployment numbers, one may ask themselves, "is now the time to buy"? Really?

Well aside from my inherent bias as a Realtor, my answer is an emphatic YES.

Why?

I've been renting houses now for nearly two years. After dozens and dozens of rentals I have noticed a single common factor in the properties I rent. The mortgage to buy it would be LOWER than the current market rent!

This may seem astonishing and even counter-intuitive at first, but even in premium locations like Coral Gables, Coconut Grove and the like, most rental prices are higher than a standard mortgage.

Couple this with the still historical lows in mortgage rates (still hovering around 4%) and the locked in interest ceiling by the FED until 2013, and I have to say emphatically YES to my rhetorical question above.

There are some caveats however.

For one you'll need better than average credit. Right now banks aren't really looking at borrowers under a 680, although some will still do a 620 or above.

Also the document process is long, and arduous. After the mortgage mess underwriters have become EXTREMELY gun shy and check and double check everything but your blood type before issuing the coveted "clear to close".

Third, expect delays. Where it used to take 30-45 days to close a deal, now 60-90 days is the norm while underwriters "take their time" crossing and dotting everything. (Thank you Dodd-Frank).

Finally, unless you qualify for FHA making your down-payment a paltry 3.5%, expect 10-20% down. You'll need cash. Also on Nov 18th FHA loan limits were changed, but this won't affect most buyers.

But even with these "limitations" my answer is still a resounding YES.

Now IS the time to buy.