The current state of real estate in US

In spite of the reported problem the current state of real estate in US is not as bad as it seems. Due to the massive defaults on home loans that were made to certain types of borrowers the market took a plunge. Real estate prices in the country are now expected to recover slowly over the next year.

The current market situation sees a surplus of housing stock and low buyer confidence and they wait for the market to bottom out. This however is poised to change as the economy gets a boost from the government. The property prices however will not rise by much if at all, which will make it a buyer’s market for a good time to come.

Watch out the credit error in your mortgage report

Modern loan officers tend to work on volume. So when reviewing the credit scores for a real estate mortgage these officers will tend to look at the basic scores, without paying too much attention to reviewing the reports and discussing problems with applicants.
So when applying for mortgage loan on your dream piece of real estate you could easily end up paying a higher monthly interest rate simply because of some minor error in your credit report. This slightly higher interest rate may add up to thousands of dollars over the life of the mortgage.

Therefore, it is essential that you review your credit report to ascertain if there are any factual errors, as even a small mistake can cost you a lot of money over the years, or even stop you from obtaining a mortgage for your real estate.

Real estate mortgage loan with an interest only component

One of the modern tools in the real estate mortgage is the limited period interest only mortgage loan. Most of the interest only mortgages are not viable for banks for the full term of the real estate mortgage, so usually, the interest only period will last for five to ten years. At the end of the allotted interest only period, payments will go up because of the addition of the principal in the monthly installments.

The problem with this is, because the mortgage holder has paid no substantial principal for all those years, when they begin to play the full mortgage payments on the real estate the monthly amount payable will be considerably higher, because they now have five or ten years less of the mortgage life, to complete repaying the principal loan amount.