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listen we've been hearing it for months you know the housing crisis it's happening 2021. all these gurus have been saying like winter is coming like it's a game of thrones but they're not really like even paying attention to the fact of what's going on right this very moment and they don't see that the housing crisis right now has already started i'm just going to be completely honest and share a story with you that's just happened to me i've been working with a buyer that um has been trying to buy this house for almost six weeks now and during that six weeks the seller took the forbearance if you don't know what the forbearance is is basically you ask your lender because you've been affected by the uh recent events and that you want to take those house payments and put it to the end of your loan what some people didn't seem to understand and this what this seller didn't understand is that those payments aren't forgiven they're not like magically disappear the bank's going to eat that cost we get to closing everything's done hours beforehand we find out because he wasn't honest with the lender he wasn't honest with the title company he told them a payoff and so we were six thousand six hundred dollars off this guy can't sell his house and he doesn't have the money this is the beginning of the housing crisis many people don't know especially in this situation if you have a 401k or even an old one laying around from a previous work employer you can borrow money against your 401k without penalty because of the cares act they allowed you to take that money out without having any kind of penalty right now granted that's going to go against you know your savings for your future but it could help you save you from not losing your home the housing crisis before this was even even just as frustrating i've been talking to real estate agents across the country and every single one of them say the same thing housing prices are going crazy they can't find homes that are affordable for their first time home buyers there's houses that they know aren't worth the money that people are paying for them right now red hot housing market august sales of existing homes hit the highest level in nearly 14 years soaring more than 10 from a year ago but inventory is low there were nearly 2 million fewer homes available and then at the same time last year my friend javier vendana has worked with buyers in arizona and they've been outbid ridiculous amounts of money 10 20 30 000 for a first time home buying experience what i'm noticing now in this market and what i think will happen for the next foreseeable future is concerning to me for some reason during virus uh where people thought that crime housing market was in a crash the opposite happened right uh sellers stopped selling buyers wanted to buy created this insane supply demand situation where houses were selling much more than the value they were supposed to sell for we're talking people waiving their appraisal contingencies so that way whatever it appraises that does not matter because they're going to force the value of that house to go higher because that now that new house will be a comp or comparable for that neighborhood and now their neighbors are going to try to solve for more and it's further and further taking the ability for first-time home buyers to purchase away from them i don't blame the sellers i mean if you're going to take a contract why wouldn't you take the contract that's going to give you 20 000 over list price instead of taking the kid who has a government-backed loan and it's just going to try to buy it at list price of course as a seller you want to make as much money as possible but it's just driving the price higher and higher and higher and the interest rates being so low it's it's causing this problem for first-time home buyers if the interest rates don't go up and the prices don't come down it's it's one of those things that's how the market's always been driven and a lot of people are nervous because they're saying well you know what about 2008 in 2009 when we had the biggest foreclosures throughout the united states and then there's people on the other side that are saying well it's not going to happen there's going to be no foreclosures like there was in 2008 and 2009 because a lot of people have a good eight percent equity in their houses it's not possible for them to be foreclosed on but let's be realistic if you have taken the forbearance and you have not made one two three four payments on it and you're like well wait a minute mr bank i have a hundred thousand dollars worth of equity in in my house can i just use that to make those payments the bank isn't going to let you do that matter of fact they're hoping they're praying they're like begging please don't make that payment so they can foreclose on you and they can eat up that profit they can eat up that equity they're not going to fail like they did before because they can eat up the equity in all these people's houses and all they're going to do is resell them now if you do have equity in your house and you haven't lost your job but things are just kind of tight and struggling because you know your business isn't working the way it used to be because of the shutdowns and everything you can if you have like a ton of equity go ahead and think about getting a heloc i don't know if you've ever seen a heloc but it's just a home equity line of credit so let's just say that you know your your your house is worth 300 000 but you only owe 250 you have 50 000 worth of equity that you can work with now listen not every lender is going to let you borrow a hundred percent of what your home is worth but yeah you might find some that let that might let you borrow 90 of what your home is worth and maybe you can take out a loan um all the way up to 270. um so you might be able to take out 20 000 um and pay that back um so there's a lot you get a lot of tax benefits with interest because it is on a on a more you know it is on a piece of property um maybe it's your primary residence you might be able to save some money there um a lot of times there's no closing cost with home equity lines of credit so it's like it's one of the there's a lot of benefits to getting that type of thing and you know what i always tell clients hey go get your line of credit set up if you don't use it fine but if you ever run into an emergency i can tell you what if if the economy changes banks are not doing heloc so i always suggest just getting it done and having one there for an emergency it's totally different than getting like a second mortgage that's something completely different a heloc is basically you're borrowing the equity from yourself and you just write a check so if you're in the financial crisis right now and you're trying to make ends meet consider getting a heloc you might as well borrow your own money the interest rates on them are really reasonable and you're only having to pay the interest on what you borrow not for the whole entire loan like you would if you were you know buying it doing a second mortgage where you would have another mortgage just like a standard payment you only would get a payment that would be on exactly what you borrowed so definitely consider a heloc if you want to sell your house right now i mean it's easy for you to sell this most equity you're ever going to get and if you're work didn't have any other plans or if you're thinking about downsizing this is the time to do it don't let the banks get a hold of your equity try to save your home as much as possible don't let these big house flippers investors take over your house you've worked really really hard for and if you're a new home buyer just hold tight things are going to look up for you really soon because unfortunately there is going to be some foreclosures you might pay a little bit more in interest but at least you can get into a house okay so i haven't paid the most rosy picture when it comes to the real estate market as we look at it right now but that doesn't mean that time can't heal all wounds just like it always does everything always corrects itself the market tends to always do that but i have given you some tools that you can talk to your financial advisor if you're in a state where you're not sure if you're going to be able to save your home or not and today happens to be the election day and no matter who wins the path of the real estate crisis has already been carved if you'd like to watch some more binge-worthy content about real estate go ahead and click this playlist right here my name is christina smallhorn your real estate whisperer and i tell you all this because good real estate information matters