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WARNING! Are you ready to dive into the wild world of buying a home in 2010? Well, you better buckle up because time is running out! The recession of 2007-2009 may be fading into history, but there are still plenty of forces working against you in the real estate market. Here are five key things you need to know:
1. The Federal Reserve has been propping up the housing market with a massive stimulus package, buying mortgage securities left and right. This has kept interest rates artificially low, but the party is ending soon. By March, those rates are expected to shoot up. So if you want a mortgage with a decent rate, you better get your loan approved and lock in that rate no later than mid-February!
2. Lenders are still feeling cautious after the financial crisis, and they’re tightening their underwriting guidelines even further. If you don’t have a stellar credit score and a hefty down payment, you might have a tough time getting approved for a home loan. And come summer, it’s only going to get harder. So start saving and get your credit in order if you want a shot at buying a home.
3. The government has been passing all sorts of new laws to protect consumers, but one unintended consequence is that mortgage brokers have been pushed out of the market. Brokers used to offer more options and competition, but now it’s just the big banks calling the shots. And they’re not exactly incentivized to offer you the best deal. So be prepared to do some serious shopping around if you want to find a good mortgage rate.
4. If you’re hoping to take advantage of the home buyer tax credit program, time is running out. You need to be in escrow by April 30th and close the deal by June. This means there’s going to be a frenzy of buyers trying to snag a home before the deadline. So get in the game early if you want a shot at finding a good deal.
5. March is when things really start heating up in the San Diego housing market. Buyers come out of hibernation and the number of closed sales skyrockets. But if you wait until March to start looking, you’ll be facing some fierce competition. Expect bidding wars and inflated prices. So if you want to avoid the chaos, start your search now.
The housing market has been through the wringer, but things are looking up. Don’t let these forces work against you. Get pre-qualified for a loan, know what you’re looking for, use technology to your advantage, and make those offers. It may take some time and patience, but you can find a great deal if you stay on top of the game. Happy house hunting!
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