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What's the Big Question on Everyone's Mind?
- By John Parks
- Published January 21, 2009
- News and Society , Society
- Unrated
John Parks
For more information on home loans, visit http://www.stimulushomeloans.com.
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One of the biggest challenges facing our economic recovery is the restructuring of the housing market. Home loans and how to stimulate positive activity in the real estate market, is the big question on everyone’s mind. We all want some sort of stimulus from the government so the build-up of bad loans, financial blunders and investment scams can come to an end. The message that is being passed across the country is that we need a stimulus, a home loan stimulus, to open the doors and get the housing market on its feet. Real estate prices have dropped anywhere from fifteen percent to almost forty percent in areas that we called the boom towns of the 21st century. People have watched their major investment wash down the drain of greed and now wonder what will happen next.
No one is willing to experience this kind of financial torture for very long. One stimulus package for home loans has already been approved by congress which provides more tax breaks for businesses and injects capital in the mortgage market. This plan also calls for injecting money into the housing market by redefining jumbo loans in terms of a dollar limit. It would allow Freddie Mac and Fannie Mae to participate in these loans up to the limits and offer homebuyers lower interest rates as well. Redefining Jumbo loans however, is not the stimulus that’s needed to get the home loan market up and going again at full power. The
ability to get home loans back on track rests on our shoulders, as well as the banks and lending institutions. Until they feel comfortable lending money at a profit they consider appropriate for their business model, the housing industry and home loans will fumble around in the mud of indecision.
There will be a new way of doing business this year and in years to come. It’s not really new; it’s been around for centuries. In order to get a home loan or any loan, the loan will be based on how much equity you have to put into that loan. The stimulus for this system is called cash. It’s an equity stake that the homebuyer uses to help the banks protect their investments. The days of no-equity home loans are over, even the credit card loan business will be based on similar terms. The amount of liquid equity you have, meaning assets that can be turned into cash immediately, will determine whether you are home loan worthy or not. Since our system has been a credit based system for years, this approach will eliminate a lot of people from purchasing a home until they save enough to produce assets that can be used as equity.
Our global economy will adopt a version of this old proven method to stimulate home loans and get the real estate market back on track. The government will inject the needed capital to take some pressure off of us, but it’s is our responsibility to develop an honest, reliable and fair system that offers home ownership to everyone who is willing to invest in their future.
No one is willing to experience this kind of financial torture for very long. One stimulus package for home loans has already been approved by congress which provides more tax breaks for businesses and injects capital in the mortgage market. This plan also calls for injecting money into the housing market by redefining jumbo loans in terms of a dollar limit. It would allow Freddie Mac and Fannie Mae to participate in these loans up to the limits and offer homebuyers lower interest rates as well. Redefining Jumbo loans however, is not the stimulus that’s needed to get the home loan market up and going again at full power. The
There will be a new way of doing business this year and in years to come. It’s not really new; it’s been around for centuries. In order to get a home loan or any loan, the loan will be based on how much equity you have to put into that loan. The stimulus for this system is called cash. It’s an equity stake that the homebuyer uses to help the banks protect their investments. The days of no-equity home loans are over, even the credit card loan business will be based on similar terms. The amount of liquid equity you have, meaning assets that can be turned into cash immediately, will determine whether you are home loan worthy or not. Since our system has been a credit based system for years, this approach will eliminate a lot of people from purchasing a home until they save enough to produce assets that can be used as equity.
Our global economy will adopt a version of this old proven method to stimulate home loans and get the real estate market back on track. The government will inject the needed capital to take some pressure off of us, but it’s is our responsibility to develop an honest, reliable and fair system that offers home ownership to everyone who is willing to invest in their future.