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Time To Buy: Real Estate In Wisconsin
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Nationally and in Wisconsin, home prices are on the way back up. The collapse in prices that followed the housing crisis that began in 2008 appears to be easing, and based on the Standard & Poor/Case-Shiller Composite-10 index for home prices, home values went up about 18 percent between February 2012 and July 2013. That is the largest 16- month increase in home prices since the period ending in July 2004. This is good news for those considering buying a home. While it is still vital to ensure that the home you buy matches your ability to pay for your mortgage, the possibility of turning a profit on a real estate purchase is now much more realistic than it was a few years ago.
In Wisconsin, the current numbers match the rosy prospects of the national increase. According to the Wisconsin Realtors Association, 63,146 homes had already sold in the first 10 months of 2013 in the state. In all of 2012, only 62,788 sold. Before 2012, no year had featured more than 55,000 sales since 2007 -- before the crash.
Median price is an even more important indicator than the number of sales, particularly for those looking to invest in a house and then turn around and sell it at a profit, rather than use it for a long-term dwelling. The median price for the first ten months of 2013 is $144,225, the highest median value since it hit $154,000 in 2008.
You might have heard that obtaining a mortgage is much more difficult than it used to be. 2014 will welcome a new host of rules for lenders, but a lot of them are simply designed to keep homeowners from getting mortgages that are beyond their means. Lenders now have to get documentation of at least eight metrics, including assets, income, credit history, outstanding debts and current employment to figure out if the borrower will be able to pay the loan back. If your lender doesn't do that, you can sue the lender if you fall behind. The "qualified" mortgage is a product that gives the lender extra protection. The borrower has a cap of 43 percent of monthly income to spend on debts, including the pending mortgage. Terms can no longer go beyond 30 years, and such risky items as balloon payments and options to pay a smaller amount than the actual monthly interest cost are no longer available. If the rate is subprime, borrowers have more methods for challenging the lender on its process of determining that they could afford the mortgage in the first place.
What is the upshot for potential Wisconsin mortgage customers? It is still true that mortgage applications are on the decline, but people with sound financial situations and stable employment histories are still gaining approval. With home equity declining over the past four years, homeowners are taking more risk. Your home is the largest financial investment that you are likely to make, so if you are looking for a home in Wisconsin mortgage options are plentiful. The more you have set aside as a down payment and the greater care you have taken to protect your credit history, the more favorable the terms are going to be.
ABOUT THE AUTHOR
Douglas Lenski is a 14 year veteran of the mortgage industry and the current President of Wholesale Mortgage Services of Wisconsin. He has trained 20 loan officers and 8 mortgage loan processors. He is considered an expert in the mortgage industry by his peers. He has written many blogs on mortgage rates today , Wisconsin Mortgage rates and many more.
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