Medicare Supplement – Insurance Quotes

The stock market experienced a difficult time what with Lehman Brothers’ bankruptcy and the sale of Merril Lynch causing the market to plummet on their news.

Even those who don’t have a large investments in stocks and bonds will be concerned about what the fallout will be if they are considering taking out a mortgage and buying a home.

Since the housing and real estate bubbles were the cause of most of these problems, we can see that they are closely related. With the easy money policies that existed, borrowers were in a position to borrow over their heads, and banks did not vet the loans properly because they could just market them on the secondary market. This easy market for their debt led lenders to also overextend themselves and take on risky debt that they knew would ultimately be supported by the government in case of default. Nearly $7 trillion of new residential real estate and consumer debt was created during the first 6 years of this decade, according to Daniel Alpert, managing director of Westwood Capital. In other words, a doubling of consumer debt such as mortgages and consumer loans over the end of 1999. Now this fast growth in debt is coming back to haunt us.

This type of economic shift is sure to have an effect on all markets. The International Monetary Fund predicted early in2008 that the global credit crisis may cost the total world economy $1trillion this year.

This spiraling crisis will have a substantial impact on the housing market. First of all, banks will only be able to grant fewer and fewer loans. Plus, consumers have to stop borrowing in other areas, once their home loans are threatened, which means less lending business for banks, which means reduced income.

All loans, and not only mortgages will be tough to get. For some, this may be the best news for some time, since it may signal more normal lending practices.

For some prospective homeowners, this may be extremely good news. With too little mortgage money chasing too many houses, home prices will continue to plummet. With falling prices, speculators abandon this market, and they had an inflationary affect on home prices. So those who delayed buying may still have plenty of time to find a bargain. Especially for those who used this waiting period to build a savings account for a larger deposit and have maintained an excellent credit rating, they will have their pick of banks and houses.

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Tags: Insurance, mortgage rates, mortgages, mortgane loans

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