By now, most people have probably heard about the alleged recession that’s happening in the United States. This is mostly driven by the media, and if you listen to what the financial gurus have to say, it’s not really as bad as it seems. Take Warren Buffet for example, one of the richest men in the world. He believes that the current slow down in the American economy is simply that: a slow down.
You might ask how this all translates to the mortgage world. Essentially, a lot of good, solid clients who would otherwise be looking for a mortgage are shying away from the idea because they believe the United States are heading towards a recession similar to that of the early 1980s (which, coincidentally, also hit Canada). They believe that borrowing money at this point will cost them an arm and a leg…but that’s not the case.
Mr. Buffet sums it up well when he says that the money is there…we do not have an unavailability of credit to people who’ve got reasonable credit demands and it’s not expensive (Financial Post). This stems from the idea of flight to quality: there is always a reason to lend money to good people with good credit and good jobs. To the mortgage lenders (and other lenders for that matter) they’re considered an excellent investment as they’re the type of client that pays back their loans.
Basically, the key idea here is that if you have good credit and a stable job, and are looking to get a mortgage, it’s not going to be hard to get one.
If you’d like to read more about Warren Buffet’s interview with the National Post, please follow this link.
If you’d like to explore the mortgage options you have, please contact First Foundation today to set up an appointment.