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How To Make Less And Buy More Of A Home

How To Make Less And Buy More Of A Home

Just Some Facts: 
As a direct result of some really incredibly low bond yields 30 year fixed rate mortgages remain in the 3’s as compared to rates in, say 2006, in the high 5’s.  Add that to the fact that since 2006 home prices dipped really low, and are now at levels equal to or greater than in 2006 (they have completely rebounded), at the same time as average incomes in the Southern California area have decreased from $61k to $54k from 2006 to 2016.
So how can people who are now making less money afford more of a home?
 
Simple “lower interest rates.”
Now expand this to the US and you discover that this same phenomenon is happening with our government. The US debt has increased from some 9 trillion to about 20 trillion while the interest payments have remained relatively flat. This is possible because the interest rate on this debt has significantly decreased. So what happens to home prices and to our government’s ability to make the interest payments on the National debt when rates rise?
I wrote a bit ago about a husband sharing with his wife, “Honey, we spent more money than we made this year, but the good news is Mastercard increased our limits so we are good.” Where are we headed?
 
What do you think? 
William Sonsma - fbf loans
Fidelity Bancorp Funding is an Orange, California-based firm providing mortgage options to meet the long-term needs of clients of all ages and scenarios, including Realtors, homebuyers and investors. Founded in 2000, the firm is dedicated to superior standards and best practices, and recently surpassed $9 billion in funding provided nationwide. Fidelity Bancorp Funding specializes in assisting homebuyers or those in complex situations or who need alternative options such as bridge financing to help ensure that they get the deal they want.
For more information, visit www.fidelitybancorpfunding.com or call (714) 908-5100.
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