If you’re looking to buy a house, you need not look very hard. Everywhere you turn there are “for sale” signs. Many home buyers might be scared away by the doom and gloom forecasts of a housing slump and foreclosures.
“The companies that get into business to make mortgage loans, they were able to go charge higher rates,” said Linwood Nooee of Executive Mortgage Company. “For a number of years, they appeared to be extremely profitable.”
Nooee says many of these sub-prime lenders used adjustable rate mortgages. They lock in a fixed rate for two years then adjust, usually every six months. By the time the home owner realizes it, they can’t afford the payments and the bank forecloses.
“We’re seeing more foreclosures and those sub-prime lenders are falling daily,” Nooee said.
But it’s not all bad news if you know what you’re doing. Knowledge is the key. Even with foreclosures up, mortgage bankers say it’s still a buyer’s market because interest rates have stayed low.
Executive director of the Mortgage Bankers Association of Mississippi, Quintin Whitwell says, stay within your means.
“Stick within a price range you’re comfortable with and if you’re not sure whether or not our circumstances will change and are uncomfortable with the market, make sure you operate on a fixed rate basis,” Whitwell said.
And he says the market is still good on many homes.
“The interest rates are still low especially in that 150 to 400 market, and so folks that might be interested in buying a home in that market,” said Whitwell. “I would say now is a good time to buy.”
Mortgage bankers interviewed said a lot of loans were made that should not have been. And even though the market isn’t as good as it was in 2005, they don’t see a housing slump for Mississippi.