Sunday, March 19, 2006

Attack of the variable rate interest only mortgages

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I just talked with a friend of mine in Atlanta.
She's a realtor and always trying to encourage our family to relocate to Georgia's slightly warmer climate.
I think she'd be more convincing if we lived in Minnesota, however, living near Atlanta would be a bit more exciting than small town NC.'s the important point.
She says the market has a very large representation of pre-bankruptcy house sales - some quite nice - especially the higher end ones. Apparently many people over extended themselves when buying homes in Atlanta - many financed them with interest only ARMs and now they're having trouble meeting their mortgage obligations.

What does this mean to you and me -- not much unless we're buying a home in Atlanta. What does it mean if you're buying? I think distressed properties are being listed with a 10-20% discount. However, they're getting lots of traffic and usually have quite a few appliances, etc... removed by the owner. So inspect carefully. To take advantage of a deal like this you need to:

  1. know what you want
  2. be ready to put an offer on the table right away
  3. be pre-approved for financing (to support #3)

For those of you in the Atlanta market -- good luck.

The next big question is whether this trend will continue in other metro areas. Is anyone currently shopping for a house? Has anyone seen any interesting trends?

I do have to compliment Atlanta for the impressive quality of it's housing stock - it really puts NC to shame!

Have a great Sunday,

Making Our Way

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