Home Owners Gain Value with Vacation Homes in Maryland

With all the talk of a souring economy, poor housing market and unemployment at 9%, there are still some value home purchases for those looking at a 2^nd home. This is especially the case in the resort communities of Deep Creek Lake and Ocean City which offer year round attractions. The economic downturn has kept many from pursuing vacation properties and reduced state budgets have caused already struggling businesses to “fend for themselves” for coveted tourist dollars. In addition, proposed doubling of the bay bridge toll has left many worried interested homebuyers and other tourists will be hurt further, thus pushing down prices further. When you also factor in gas prices that while currently declining, are likely to average over $4/gallon this summer, it only makes such vacation spots more appealing.

Many assume buying a 2^nd home would be cost prohibitive, especially when it comes to the down payment. People assume the mandatory 20% would be required and they ask themselves “where would that possibly come from”. In actuality, qualified vacation home buyers may be able to qualify with as little as 10% down payment and the seller of the home help with the closing costs. Available rates are still near record lows for 2011. Other issues that generally pop up – its “just not in my price range” just doesn’t hold water anymore. There are many vacation owners looking for a quick cash infusion by getting rid of their homes. Unfortunately declining prices and falling demand often makes this prohibitive.

Investing the purchase of a 2^nd home is something many Marylanders should look at. Maryland and other local vacation hot spots are family friendly, offer fishing and other outdoor activities, and are now more affordable then ever. Purchasing a vacation with young children provides for years of trips as well as ties to the community during the summer or wintertime. Over time equity will be built providing for better long –term financial security. Prices are even more affordable the further out from the vacation locale. Once you determined investing in a vacation home is right move for you make sure to get a qualified realtor who is aware of the local market.  A simple real estate website search can also find properties geared toward your own home requirements. 

Purchasing a vacation home is not for everyone, but it something everyone should always consider.

Good news for a struggling home finance loan market

Homeowners sitting on the fence about buying a new home or thinking they missed the last rate drop, think again. Mortgage interest rates have dropped for a fourth consecutive week last week. The national average 30 year rate at 4.67% is down 9 basis points from the week before. The numbers are quite favorable and continue to be a bright spot in an otherwise lackluster economic recovery. As consumers are hit with rising gas and food prices leading into the summer season, such news can often make or break homeowners already squeezed with higher payments or those trying to qualify to purchase a new home. Just a quarter percentage drop on a 30 year mortgage can increase purchasing power by approximately $15,000 (based on a 20% down payment). In Maryland, where the average home price is above the national average, people may save thousands per year. Such rate drops can be a vital key to helping stabilize the housing industry that some feel may be facing a double dip housing recession.

There are many homeowners who believe they have more than enough time to take advantage of such market conditions. They think rates will eventually drop down to the all time lows they missed from the last “rate drop cycle”.  Many add that rates just “continue to drop” due to conditions that may be relevant, are hardly the main issues effecting rate movements. In fact, institutional trading by mutual fund bond trades, pension fund investments, foreign governments, and especially Federal Reserve Board Asset Purchase Programs better known as “Quantitative Easing” or QE II, are the largest factors to cause interest rate shifts. People assume Congress will eventually artificially “prop-up” the housing market with more stimulus programs meant to push rates further down. Such assumptions are unlikely because Congress is divided among party lines and voters are more concerned about rising debts than they were a few years ago. The lending industry today is also more prone to reduce programs rather than add them to the options available. In addition, the housing market is faced with slowing sales and falling home prices. Because of these issues, additional opportunities may never be possible. Furthermore, those deemed to be in high priced county areas are about to lose have their expanded loan limits reduced as of September 30^th.  This means that people who have loan balances above the standard limit $417,000 limit and up to $729,750 will have difficulties obtaining loans.

Predicting rates and making assumptions can be quite risky and often times foolish. There are far too many factors that the average consumer….or even real estate/mortgage professional cannot accurately understand.  Those truly looking to take advantage of the important benefits of lower rates must be prepared to take advantage of the opportunity when presented. Timing the interest rate market is a lot like timing the purchase of a stock, it will fail miserable in the vast amount of cases. For most it can be the difference between keeping your home and making it more affordable or having a once in a life time opportunity to upgrade to a better home that more closely meets their needs.  If you think you may benefit from checking into your options, email us today!