2011 flew by, and now 2012 upon us. Time for New Year’s resolutions, a plan to make one or another aspect of our lives better by this time next year.
I looked for a solid statistic about how many of us keep our resolutions; and although I could not find anything I would call scientific, a general consensus seems to be that between 92-94% of us actually keep our New Year’s resolutions.
So, this year, I propose you and I scrap our New Year’s resolutions, and instead formulate our New Year’s Plan. As with any plan, it needs to be specific and written. A resolution might be, ‘I want to exercise more and get in better shape’. A plan is more specific, ‘I will be out the door to the gym every Monday, Wednesday and Friday by 6am to make my appointment with my new Personal Trainer’.
Ouch. Sounds like that one is going to hurt – but in a good way.
And now let me propose that you include real estate in your plan for the new year. Why this year, in 2012, you might ask? Simple, as my friend Snap likes to say, “In real estate right now the planets are aligned, Mars is aligned with Jupiter and the moon is in the fourth quadrant“.
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Okay, I always wonder just a bit what he means by that as well; but what is certain is that Atlanta mortgage rates are low – as of this writing they are back to their lowest point EVER. That fact aligns with the low, low prices on homes and with an inventory that is mostly either short sale or bank owned homes, and banks are really starting to loosen up and just make the deal to move properties off their books.
And the only objection to not buying other than personal finances are not in line yet, is that home prices could fall further, that we have not hit bottom yet. And that is where I love this graphic from KCMblog:
Sure, prices by some estimates may drop another 4-7% before we see a bottom.
But as that happens, mortgage interest rates will certainly rise. And a 1% rise in interest rates equates to a payment equal to a 10% drop in price.
None of the economists that I follow are predicting that much of a further fall in home prices. So, the conclusion would be to take advantage and buy now – to take advantage of the stars and planets aligning.
Then the only question left is How to take advantage of this perfect housing market? We are all different and at different stages in our financial lives and situations. So, let me give you a few ideas, and hopefully you will incorporate the appropriate ones into your life plan for 2012:
- Buy Your Own Home: Whether single or if you have a family, there is no better way build wealth and protect your security than to own your own home. For some credit is an issue and needs some work to rebuild good credit; and for others coming up with the down payment is a difficulty. My team and I can help with both, if you are committed to buying a home in 2012.
- Pick up an Atlanta Investment Property: Few better ways exist right now to diversify your investments and really increase cash flow, with tax advantages, than income producing real estate. I work with some of the best wholesale groups in town, and would love to help you fit that into your plan. Oh, and we have some great Atlanta investment property loans.
- Buy a Second Home: If you are in the enviable position to buy a home at the beach or in the mountains, then what better way to get away (from Atlanta traffic!) and relax…and more importantly to create memories with your family that will last a lifetime. Many people do not realize that conforming loan rates for a second home are exactly the same as for a primary residence. And, many more don’t realize that jumbo loans are available and priced very aggressively for second homes as well.
- Refinance: With rates this low, who would not consider refinancing?
- Out of an A.R.M.: Many people are still in an Adjustable Rate Mortgage. If your plan is to stay in the home long-term, then you really, really need to look at a long or short term fixed rate loan. I don’t think rates will rise dramatically in the near future; but when they begin to rise, they will shoot up. And that ARM will feel like it just got beaten in an arm-wrestling tournament with Bruiser. Get out now, and fix that rate.
- Shorten the Term: If your goal, like many, is to be completely out of debt as soon as possible, then let’s look into a 15 year or a 10 year fixed rate loan. With rates this low, you may be surprised by how affordable that has become.
- What if you are Underwater?: So many Atlanta homeowners owe more on their mortgage than their home is worth. If that is you, then you may qualify for a HARP 2 Refinance, and that program will open up soon. Check out if you qualify HERE.
- Lower that FHA loan rate: A lot has changed with FHA loans, specifically the FHA Streamline refinance. No appraisal is needed, so it does not matter what you owe, and no income is calculated. So long as you are employed full time and have not missed a mortgage payment in the past 12 months, then you can very easily refinance into a streamline FHA refinance.
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So, bring in the New Year 2012 with a plan to make real estate part of your life this year. Call me if you would like input on implementing your plan: 1-800-MY-LOANS (1-800-695-6267).
I hope that I can help make your New Years Plans a reality this year.
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