william the wierd

I've been out of debt since 92 so normally I ignore credit card news but I ran across the headline that credit limits hit twice on MSN and I thought I should read it to see when I should start cruising Mayport road for foreclosed homes.

Mayport is on the BRAC hit list for later this decade and the expected lag between base closure and reopening as a cruise ship terminal is 1-2 years. This is known by everyone in the area. Buying a couple of cluster homes off Mayport should be quite profitable and since I intend to pay cash I want to buy at as close to Rock Bottom as I can. Rock Bottom may hit sooner and be deeper than expected. It turns out that when Credit Card and home equity loan limits are lowered it adversely affects credit scores.

Here's how, the example used was a $4k balance on a 10K limit is a 40% carry, lower the limit to 5k and it becomes an 80% carry. An 80% carry is treated as overstretch while 40% is not. So reduced credit limits lowers credit scores making credit less available while raising interest rates. Since I don't use credit any ideas on how fast this will translate into increased foreclosure rates?

Socio-biology and selection is a fact of life and death not a political option

Politics is a continuation of war by other means

Calling congress a parliament of whores insults the morals and principle of crack whores

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william the wierd

bumpty bump

Socio-biology and selection is a fact of life and death not a political option

Politics is a continuation of war by other means

Calling congress a parliament of whores insults the morals and principle of crack whores

Chad750

It will increase due to the fact that all that smoke and mirrors about re-financing into a lower rate has all but disappeared unless you have spotless credit.

Also I suspect foreclosures will sit on the market longer due to the fact that even though there may be buyers out there unless you are in the situation where you can pay cash, you will not qualify for a loan since the banks are going back to old lending practices.

As for your situation it seems that waiting until the 1st quarter of 2009 when banks and others are really starting to get antsy about properties will be the time to buy.

Another theory I have is that the Fed is going to have to start raising rates in order to stave off runaway inflation, if this happens prices on homes are going to really drop due to the higher interest rates. This seems to be happening somewhat already in certain areas of the country.

I predict that housing will not start recovering again until the middle of 2010 and even at that it will be slowly, so you may want to wait just a few more months.

You got to know prices are not going to be increasing anytime soon due to current economic trends, you may be in a very good position.