Proposed Mortgage Industry Reforms—Waiting Predicted to be Costly
You hear it everywhere today, the media is reporting about the current administration’s plan to reform the mortgage market and do away with or limit government supported programs, such as Fannie Mae and Freddie Mac. But, do you understand what this means to you?
Mostly, the reforms on the table will largely leave the mortgage market to the private sector, with fewer options available to first-time home buyers and low-income buyers. Interest rates are projected to increase and new mortgages will require much higher down-payments. Future down payments requirements are anticipated to be 20% of the purchase price, disqualifying most entry-level buyers.
With the current low property prices and low mortgage rates, the housing affordability is at an all time high today, but with the reforms proposed, it’s not predicted to last much longer. All signs seem to be predicting higher costs for new home purchases or refinances in the near future, and house values are predicted to rise in 2011, which would reduce housing affordability significantly.
If you already have a mortgage through Fannie Mae or Freddie Mac, your terms will not change due to the proposed reforms. If you’re considering buying a home or refinancing your current home, you may want to move those thoughts to the front burner vs. waiting.
If you are thinking of selling, these changes will also impact you, because you’ll have fewer buyers in the market in a position to buy your house.
For additional information regarding personal situations, please contact your trusted resource, Revealty at 614-621-5400 for a free consultation.