Why should I still want to buy a house when the world is on the brink of financial ruin? (cue soundtrack: R.E.M.’s “End of the world as we know it”)

By Alec Grebis, Cornerstone Mortgage, www.TwinCitiesDiscountHomes.com

1)  At least I’ll have my house if everything else falls apart.  Seriously, the main reason for buying a home is to own your own place—the “investment” value of it is second.

2) There is no Demand Clause in my mortgage: back in the times of the Great Depression mortgages had what’s called a Demand Clause.  They could call you up (or write you since almost no one had a phone) and demand that you pay off the mortgage within, say, the next 30 days.  These clauses disappeared sometime before the invention of Moon Boots.

3) If housing prices continue to drop for the next several years, the values will still come back up.  I just might have to live in my house a little longer than I expected—so I guess that’s a good reason why I should make sure I like the house I buy.  Also, what a great time to buy!  The number of homes to choose from at prices 10-20% lower than just 2 years ago makes this the best buyers market in the past decade if not longer.

4) If things get worse in the financial world, it will be easier to get a mortgage today than it will be in the future so I should act now before it gets more difficult.

5) Interest rates will be going up.  As all this new money gets pumped into the financial system the value of a dollar will drop.  And if the value of the buck goes down, the price of things will go up—that little understood word called “Inflation” will pop up every where.  So, even if home prices drop, my monthly payment could still be higher than it would be today because of the low rates.  Before 2002 rates had only gone below 6.25% once in 40 years.  I’m thinking rates around 6.0% are pretty good and I should take advantage of them—as the guy on the TV car commercial screams “Act Now!  These deals won’t last long!”

Jen McKinnon
Realtor/Investor
612.384.1073
jen [at] mnrealestateteam [dot] com

AGENT REFERRAL NETWORK
MN Real Estate Team