Saturday, May 25, 2013

Buying a House after Burst Bubbles and Other Sorts of Terrorism

Lately, as the home buying process has consumed more and more of my time and mental energy, I've been thinking about how much has changed since I last bought a house, back in 1998.  Since this blog more and more takes the place of my paper journal, thus serving as a historical record of sorts, let me record some of the ways.

Future historians, no need to thank me.  I'm sure these observations have already been recorded in analytical texts.  But for what they meant to people here on the ground, read on!

--Once, we could buy a house with very little money down.  You simply bought additional insurance to protect the mortgage company, and then when you had enough equity, or when the value of your house rose, you cancelled the insurance.  Our mortgage guy writer told us that new policies are about to go into effect which will require paying that insurance for the life of the loan.

--Once, we pored over real estate sections in the newspaper to find out what was for sale.  Maybe we cruised neighborhoods, looking for signs.  Now, there may be no "for sale" sign.  Now, I have spent countless hours cruising the Internet.  I have looked at pictures online.  I have often wondered why people didn't clean up the clutter on kitchen counter or bathroom surfaces before snapping pictures.

--Long ago, we had to guess what the seller had paid for the property.  Now, we can find the original price.  We can't tell whether or not the homeowner has refinanced, at least I have yet to find the information.  But there's all sorts of helpful information online to help a seller try to figure out what to offer.

--In my city, it's also easy to tell what work has been done under permit.  I'm not sure how much that matters to me, but I know it may be important to some people. 

--Now, if you move money around between accounts, so that you have the huge sum required for closing costs and down payments, you need to have proof that you came by that money legitimately.  In 1998, no one would have wondered if that chunk of money came from terrorism or money laundering.

--Of course, in 1998, I didn't need such huge sums of money.  I'm rather shocked by how much housing costs have increased, even with a bubble and a burst.  I'm fairly certain that most middle class earnings haven't risen in the same proportion.

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