Affordability Still Out of Reach for Median Wage Earners

Source: https://thinkrealty.com/affordability-median-wage-earners/

ATTOM Data Solutions, released its Q1 2018 U.S. Home Affordability Report, which shows that median home prices in Q1 2018 were not affordable for average wage earners in 304 of 446 U.S. counties analyzed in the report (68 percent).

The report determined affordability for average wage earners by calculating the amount of income needed to make monthly house payments — including mortgage, property taxes and insurance — on a median-priced home, assuming a 3 percent down payment and a 2…

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Are you thinking of investing in property? But you don’t have enough cash to accomplish this. Right here is a tip you can use as long as the person selling the property is willing to negotiate along.

To be fair, not every seller will be interested (or even understand) the concept outlined. Your better gamble is to locate a property that the owner has great desire for selling, whether because of moving, a divorce settlement, or they are frustrated with the people renting the place.

Actually, if you are currently renting and considering using this approach perhaps your landlord would be glad to assist you! There are several variations that may be used depending upon you and your vendor. Do they need the market price or are they just desperate to get out of the monthly payments – perhaps facing foreclosure?

The easiest method is to take over their mortgage obligations – called ‘assuming’ the mortgage. You will have to be approved by the original lender to assume the mortgage. If you can’t get approved for an assumable mortgage you may also try a ‘subject to’ assumption where you merely make payments while the property remains in the seller’s name.

You take over the original mortgage and get a second mortgage on the remaining cost of the house with the seller. Offer a high, interest-only payment for a short time period – two or 3 years. Instead of having the money sit down in a bank they can be getting a high interest over 2 or 3 years with the remainder due in full at the end of the term.

When the term ends you need to be able to refinance the cost, or you could sell. Unless you strike a genuine bad market the value of the house should have risen in that time.

Most mortgage lenders merely need to make a great investment. While your local bank may still shy away there are lots of financial lenders that would like to make a deal. Financiers prefare real estate. The mortgage is mostly based on 60-70% of the value of the land, so as long as they understand they get their money back in the value of the estate if you default, they do not care what kind of money you make. Complete the deal with a second mortgage done with the seller. In case you default they could still foreclose on the property and sell it, settling the existing mortgage in the proceeds.

Now you can see the whole picture. It is better that seller and buyer may work hand in hand. In the event that they can’t wait for a sale, you could still give them their asking price with a little overall flexibility on their part.

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