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How to Get the Market Moving Again
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As the owners of newly converted investment properties, they're no longer able to take advantage of low interest rates and refinancing programs. In fact, the market for investment properties remains rather frozen: If you want a loan, you had better have plenty of equity (north of 30 percent in many cases), a wad of cash for fees and the ability to afford a much higher interest rate.
Changing the residential mortgage lending rules to include properties that were primary residences in the past 60 to 180 days would provide some relief to homeowners who have moved to take new jobs -- and hold down the number of foreclosures.
And as part of the shared responsibility:
· Don't walk away from your mortgage. I have received many letters from homeowners who are wondering whether they should just walk away from their properties now that they are worth so much less than the mortgages. What local real estate markets don't need is to add to the number of homes going into foreclosure.
If you can refinance your mortgage to make it more affordable, you should do that. If you have to temporarily take a second job to keep enough cash coming in, then you should do that. There are long-term repercussions of going into foreclosure that should make this only a final resort.
If you can't sell but you can afford your payments, consider staying put for the next couple of years, until the market stabilizes. Let other homes for sale in your neighborhood get absorbed by bottom feeders and real estate investors while you shore up your finances.
Ilyce R. Glink is an author and nationally syndicated columnist. Her latest book is "100 Questions Every First-Time Home Buyer Should Ask." Samuel J. Tamkin is a real estate lawyer in Chicago. If you have questions for them, write Real Estate Matters Syndicate, P.O. Box 366, Glencoe, Ill. 60022, or contact them through Glink's Web sites, http:/
© 2008 Ilyce R. Glink and Samuel J. Tamkin; Distributed by Tribune Media Services
