Home Loan Focus

Archive for November, 2007

Even as I write about home loans and mortgages and real estate, I am involved directly in the process myself.  My family and I are in the middle of a move from Atlanta to the Charlotte area of North Carolina.  I am not moving in a typical process.

The typical person would move and seek to choose the best realtor that they could find from the pool of NC realtors.  Usually, they pick based on either their companies recommendation, their family or friends recommendation and then they choose based on whether or not they get along with the realtor.

The decision to choose a realtor normally takes place within a few days as most people look to move and make a decision rapidly, within a month or two.

My wife and I are not in a hurry.  We have not even listed our Georgia home on the market yet.  We probably will not list it until next spring.  That means that we will not be likely to buy a home to sometime shortly after that.  This gives us a great deal of time to pick and choose from NC real estate agents from many more sources than your typical future home buyer.

Several years ago, when we were living in Florida we had direct experience with a bad realtor.  Someone that did not have our best interests in mind, someone that was engaging in illegal red lining practices, and someone that ultimately was trying to push us into a decision that was not right for us.  We learned to recognize not only a bad realtor but a realtor that was not right for us then.

Just a few short years later, we were pointed to a very similar realtor by our company when we moved to Atlanta.  We rapidly dropped that realtor, and chose a different realtor that was the right person for the job and she did a great job by us.

So now as we move to North Carolina, we need to apply a new lesson.  We need to find a realtor that still meets all of our previous requirements, but we also need a realtor that can find us a smoking hot deal in a market that is holding its own.  The Charlotte real estate market is not dropping like many other areas of the country, but from our perspective, we can not chance that the real estate down turn will not hit here.  We can not afford to buy into a bubble here, so we are going to need a very price aggressive realtor to find that great buy and help us to negotiate it even better.  That is not a typical trait of a realtor coming out of the Real Estate boom of the last 6 years.  Realtors have learned to flip transactions over and over, the bigger the price the better.  But in the advance of a bursting real estate bubble, the successful realtor will adapt and become the champion of the great deal for their buyers. 

This means that realtors will not do well when they represent both sides of the deal.  The best way to get a good home loan starts with getting a great price on a valuable home.

There is another loan crisis that is brewing rapidly on the heals of the sub prime mortgage crisis.  Like mortgages, this other loan crisis revolves around one of the biggest investments (and possibly the most important) that most people will ever make.  This new crisis is brewing in the Student Loan market.

Many of the same banks and companies that made a killing in mortgages and even fraudulently took advantage of borrowers in the sub prime market as well.  Those same banks and companies used similar tools and marketing vehicles to go after another susceptible group of borrowers, high school and college students. 

This group of people were eager and in some cases desperate to take out money in the form of a loan so that they can go to college and get a good education, or at a minimum a degree.  That sounds very familiar on many levels to borrowers that were eager to consolidate debt, or reduce their interest charges or their total monthly payments or many other things.

At least mortgage borrowers get some sort of free gift maybe even personalized pens when they sign the close documents, but Students are just getting saddled with debt and if the recession does hit, this could definitely sap the vitality out of Generations X, Y, Z and beyond.