What effect will the "mortgage crisis" have on me? (If Any)?

Question

I am closing on a house in two weeks. I have applied and been approved for a 30 year, 6.25% fixed mortgage through Countrywide. I have no other debt.

Is there any potential problem that would cause me trouble down the road?

I consider myself blessed. I am in good health, have a good job, insurance, and am compensated fairly.

Thank You.

Answer 1

The only problem could be the same as what is worrying everyone.

You could buy a house today - then in a years time it could be worth 20/30% less (I think thats the figure been banded around)

Apart from that - be happy with your lot

xx

Answer 2

Bad possible effects are that the value of the house could go down.  In a larger sense that the economy could go into recession and cause your employer to cut back your hours, or possibly even lay you off.  

On the plus side, you are getting a house at a great interest rate and houses are generally good investments.  Also its likely we may have relatively high inflation in the next few years but you've locked in your mortgage amount (so if everything inflates 10% including your salary - but not your mortgage - your mortgage will be easier to pay and the value of your house will rise).

Anyhow, things are tough but business is still doing its thing and people are still working and everyone is stil getting by.  Just keep doing your thing and hopefully we will all ride this out until better times.

Answer 3

You should feel blessed, and it is good that you do.

Based on the info you provided, your closing should happen as scheduled. However, having applied and being approved for a certain rate is not the same thing as having the rate locked (and the rate and closing costs guaranteed in writing). I hope you have those things. If not, you may be in for one of those "surprises" we hear so much about.

As for the effect the crisis has on you, and all of us ..... each time the Fed prints Billions of dollars it dilutes the value of pre-existing dollars and leads directly to inflation (surge in commodity prices, including Oil and food). Furthermore, the credit crisis and pressure on Real Estate values go hand-in-hand.

Also, retirement accounts are threatened as earning power among Seniors goes down, expenses go up, and the dollars they do have are worth less.

This affects everyone, you included.

Answer 4

Assuming you close, it really won't affect you unless you plan on selling in the next few years or refinancing in that time.

Don't worry about the house losing a little value in the next few years.  That will only affect you if you are selling or refinancing.

Good luck.