1. 30-Year mortgage may be going away. The feds are debating on removing government guarantees on mortgages. If that happens, the 30-year mortgage will most likely be eliminated from most lenders options.
2. Mortgage criteria are going to be much more stringent. The down payment requirement for mortgages will increase & may require 20%-30% or more for a mortgage. The minimum required credit score will be much higher possibly 690 or higher.
3. Rental rates are rising and are expected to continue to rise as many will no longer be able to qualify for a mortgage.
Don’t get stuck in the rental rut, buy now while you still can.
Read below for more information:
3 Financial Reasons to Buy Now
By The KCM Crew
|Here are three great financial reasons why you should not wait before taking the plunge into homeownership.
1. The 30-Year Mortgage May Disappear
There has been much debate regarding government’s role in providing support for homeownership. There are several experts who believe if Fannie Mae and Freddie Mac’s roles are eliminated, or even limited, it may be the end to the 30-year mortgage. This concern is addressed in MSN Real Estate’s, Is it curtains for the 30-year mortgage?
2. QRM Requirements Could Be Much More Stringent
Here are proposed changes to the requirements for a ‘qualified residential mortgage’:
- Certain mortgage types would be eliminated
- You would need to put a minimum of 20% down
- You would need a minimum 690 FICO score
- The ratios of income to both the mortgage payment and overall debt would become much more conservative (28% and 36%)
There would be loans available to purchasers who don’t qualify under the new rules. However, they will probably be more expensive to the buyer (both in rate and costs).
3. Rents are Expected to Increase
The supply of available rentals is decreasing and the demand is increasing. That will lead to an increase in rental costs throughout the year. The Wall Street Journal recently quoted a report by Reis, Inc in which it states, “Expect vacancies to continue declining, and rents rising through the rest of 2011 at an even faster pace.”
You may be waiting on the sidelines to see if prices will continue to depreciate before you purchase a home. The mortgage expense is a major piece in the overall financial picture of homeownership. Make sure you consider it when timing your decision.
Reprinted with permission. All Contents ©2011. Steve Harney. KCMBlog.com.