Fsbo

Second-home markets are hurting, making this a good opportunity to look (leisurely) for a deal.

 

So rather than getting all worked up about how much your house may (temporarily) decline in value because of the subprime fiasco, start thinking about whether falling prices present a real opportunity.

A second home might be the ticket. Overall, median home prices fell 7.7% in 2007, according to the S&P/Case-Shiller index. Those in markets with a strong vacation-home component such as Las Vegas and Sarasota were down more than most.

So the market is soft. And mortgage rates are down to 2004 levels. And rates of appreciation are rather low now. It is a good time to buy.

You’ll need a credit score in the 700s and a decent income to qualify. In the days before lenders lost their minds, they expected to see no more than 36% of your income going to service your debts. That number climbed as high as 55%, but now it can’t be higher than the low 40s.

All this with the lowest rates in New England according to Money Magazine and USA today. And you can close in twenty (20) business days or less from the time of application. If you are able to make this down payment and your cash flow is adequate to cover the mortgage payment plus property taxes, insurance, maintenance, and other related expenses (such as annual condominium fees), you can afford a second home.

This entry was posted on Wednesday, June 25th, 2008 at 8:33 am and is filed under FSBO. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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