Richard's Real Estate Thoughts: Truth In Lending TIL Sticker Shock - Over 30 years I will pay back $300,000!!!

I just read a post that offered some straight talk, common sense, and realty check for home sellers.
Allison Stewart wrote a newly featured post for the Realtor group: http://activerain.com/blogsview/556384/-YOU-RE-NEED

Your need does not change the market value.

That post really made a lot of sense to me. Sometimes the customer just needs to be made aware of the reality of things. If it changes their mind about what they do, then may be for the better earlier rather than later.

Our market is facing increasing interest rates, tighter guidelines, increasing inventory, and in many areas reducing property values.

One of our loan officers with American Acceptance Mortage has for a long time used a reality check line that I like with the occasional borrower who is disarmed by the total finance charge showing on the Truth In Lending disclosure.

The customer might comment that that is just too much interest to pay over the 30 years. She offers in her sweet, gentle, encouraging way, the simple question, "How much interest would it be to pay rent for those 30 years?"

Today she had a customer decide not to purchase because it was going to cost $300,000 over the life of the loan. She simply asked how much is it going to cost to rent over the life of you?

The reality check refocused the person's perspective and that person is now an approved buyer.

With interest rates increasing, and I think increasing for the long term, borrowers will need to be educated into the new market realities.

Sometimes a gentle reality check line goes a long way to keep the factors of our choices and expectations in a realistic perspective.

You will find a mortgage professional here. Whether you want conventional, FHA, VA, Rural Development, Reverse Mortgages, Construction Permanent, credit guidance, mortgage or home or other information in Tennessee, Georgia, or Alabama, call me, Richard Smith: