One Totally Different Reason To Consider Buying A Home This Winter
Since November 1, the following banks have written-down at least $1 billion in their respective loan portfolios:
- Bank of America
- Barclays
- Bear Stearns
- Citigroup
- HSBC
- Morgan Stanley
- Wachovia
- Wells Fargo
This is a big deal to home buyers and home sellers because when banks repeatedly take mortgage-related losses, it can lead to major risk aversion — even for “good” borrowers.
It’s one reason why mortgages are more difficult for which to qualify than in months past. Banks would rather pass on an “avergage” mortgage application rather than be stuck with a potentially “bad” loan.
If banks continue down this path throughout 2008, it means that buyers eligible for home loan financing today may be ineligible tomorrow. It could also mean that a seller’s home under contract may never close because the buyer’s approval could be disqualified before the closing date is reached.
If you’re a home buyer and your profile is not “ideal” to a bank, now may be a good time to write a contract because your mortgage options may get thinner very, very soon.
If you’re a home seller and your typical buyer is not “ideal”, consider a 30-day closing because with each passing week, your pool of ready-to-be-approved buyers is dwindling.
