Mortgage Rates Are Low, But Are The Homes Affordable?

The Current State of Home Affordability Can you afford to buy a house in today's market? Knowing something about mortgage interest Buying a house is a very important decision in a person's life and it depends on many factors. affordability data can help a lot. rates, average home prices and other home 7,344,000 the number of new, privately owned housing units authorized from Sept. 2009 to Sept. 2010 House prices Buy a house you can afford Median house prices over the years 7x one house median value S30,600 in 1940 $219,700 in 2010 210,000 180,000 Median home values are seven times higher than they were 70 years ago, when the first housing census was done in 1940. 150,000 120,000 90,000 4 years' salary 60,000 Today, the average American household can gather up the money to buy a median priced home in 4 years. That is if no money is spent on anything else. 30,000 1940 1950 1960 1970 1980 1990 2000 2010 year Mortgage Estimated Median New Home Prices by State in Thousands in 2007 What is it? A mortgage is a loan to finance the purchase of real estate, with specified payment periods and interest rates. The borrower gives the lender a lien on the property as collateral for the loan, 135-168 168-210 210-249 249-385 385-544 highest: $544,000 Hawai lowest: $135,000 Mississippi Carefully read all documents At the conclusion of the home loan process, you should carefully read all documents and get answers to all your questions if you have any doubts. Choose the right one The primary mortgage market has several segments. prime alternative-A subprime government-insured Serves borrowers with strong credit histories and provides the most competitive interest rates and mortgage terms. Serves borrowers whose credit histories are close to prime, but loans are often a higher risk. For borrowers who may have difficulty qualifying for prime mortgages, but pay insurance premiums or guarantee fees. Serves borrowers with blem- ished credit and features higher interest rates and fees than the prime market. 14.00 12.00 Mortgage rates are going down An increasingly competitive environment led lenders to lower mortgage rates 10.00 8.00 6.00 4.00 1965 1970 1975 1980 1985 1990 1996 200 206 2010 Foreclosure You should be aware of the consequenes Delinquency Default Foreclosure is a legal, and often lengthy, process with several possible Delinquency is the failure of a outcomes, including that the borrower sells the property or the lender repossesses the home. Default occurs when a borrower is 90 or more days delinquent. Fore- closure becomes a possibility borrower to meet one or more scheduled monthly payments. Foreclosure causes unemployment rates house price changes low underwriting standards economic aggressive hardship lending practices Unemployment rates 12% 1953 2005 one in 20 people was unemployed. of the houses in the Las Vegas metropolitan area were foreclosed. That means five times more houses than the national average (2.21%) in 2009. one in 40 people was unemployed. 2010 one in 10 people is unemployed. Some tips Before buying a house consider: picking a house you can afford consulting an experienced house inspector choosing the right mortgage getting professional advice Sources: http://www.census, gov | http://www.miseryindex, us | http://www.gao.gov CREDITSCORE Information provided by: http://www.creditscore.net/ 00'ocs 544,600 ss6,600 00e'sos s93,400 $101,100 D09'BLLS 00L'BL2S