Getting Back to Normal

The wild-eyed, everybody-gets-financed, buy-buy-buy, the-sky's-the-limit mortgage days have finally passed . . . and for most Americans that's a good thing! Remember reasonable real estate is always a good investment, but when the situation isn't reasonable everybody better look out.

"Mortgage lenders large and small are shutting their doors, home builders are offering incentives to help them move unsold homes, and potential home buyers are no longer being showered with pennies from heaven. Today’s would-be homeowner has to purchase a house the old-fashioned way: with cash and credit.

'I think we have gone back in time to where some people have to put some skin in the game,’ said Andrew Looker, regional builder sales manager in the Carolinas for J.P. Morgan Chase Bank. 'We were giving loans to people who had no business getting into a house and they were being set up for failure. Everybody should have a house and the pride of home ownership, but I think you have to earn that right.'

While the mortgage industry is now struggling with tighter funds, that doesn’t leave potential home buyers without hope, Looker said. Chase is not having problems with mortgage lending, Looker said, and applications in the Carolinas were up about 30% in August.

'The economy is still very strong both in North and South Carolina,' he said. 'If you have the wherewithal to buy a house, if you have the credit, 401(k) savings and things of that nature, you’ll get a loan.'

Consumers can still get mortgages with good interest rates, but [Robert Young, chief financial officer for Summerville Homes,] believes many are not educated enough about the industry to know where they stand.

'A lot of people that come in to see our homes are very able, even through the credit crisis, to afford one of our homes,' Young said. 'They just don’t know that. It’s more a lack of understanding of what they can afford.'"

For the full Charleston Regional Business Journal article: http://www.charlestonbusiness.com/pub/13_19/news/10319-1.html